More on the Recoveryless Recovery
Time to Downgrade the U.S. Political System

Obama Appears to Have "Negotiated" the Most Imprudent Budget Deal Ever

Now is not a prudent time to strike a deal that cuts spending this year. Yet Obama is about to do so, rather than take any of a wide number of steps he could take to preserve the credit of the United States of America and be a good steward of the economy.

Marc Ambinder, last December, warned him about what was going to happen. And he ignored Marc.

Paul Krugman remembers:

Tax Cut Memories/a>: Obama, at his press conference last December…. [T]he questioner was Marc Ambinder:

Q Mr. President, thank you. How do these negotiations affect negotiations or talks with Republicans about raising the debt limit? Because it would seem that they have a significant amount of leverage over the White House now, going in. Was there ever any attempt by the White House to include raising the debt limit as a part of this package?

THE PRESIDENT: When you say it would seem they’ll have a significant amount of leverage over the White House, what do you mean?

Q Just in the sense that they’ll say essentially we’re not going to raise the — we’re not going to agree to it unless the White House is able to or willing to agree to significant spending cuts across the board that probably go deeper and further than what you’re willing to do. I mean, what leverage would you have –

THE PRESIDENT: Look, here’s my expectation — and I’ll take John Boehner at his word — that nobody, Democrat or Republican, is willing to see the full faith and credit of the United States government collapse, that that would not be a good thing to happen. And so I think that there will be significant discussions about the debt limit vote. That’s something that nobody ever likes to vote on. But once John Boehner is sworn in as Speaker, then he’s going to have responsibilities to govern. You can’t just stand on the sidelines and be a bomb thrower.

And so my expectation is, is that we will have tough negotiations around the budget, but that ultimately we can arrive at a position that is keeping the government open, keeping Social Security checks going out, keeping veterans services being provided, but at the same time is prudent when it comes to taxpayer dollars.