I suppose this is now moot, but I still want to address this:

What does it mean that Democrats want to believe this, or that articles about double-secret debt solution loopholes are so popular? It’s sort of ominous. Not making a one-to-one comparison here, but it puts me in mind of the Tea Party-inspired Republican efforts of 2009-today to prove that this or that program they don’t like can be magicked out of existence by putting the Consitution in a black hat and reading it with special glasses.

I would answer that, in Paul Krugman’s words, outrageous behavior demands extraordinary responses; no one would be talking about invoking §4 of the Fourteenth Amendment or minting trillion dollar platinum coins if the Republicans hadn’t turned the debt ceiling vote from a routine opportunity for grandstanding into high-stakes negotiating over the long-term budget outlook. I would also say that enthusiasm for these options stemmed from frustration with President Obama’s apparently feckless response, in which he assumed a level of reasonableness and flexibility among House Republicans that, frankly, isn’t there. This situation is also why Matt Yglesias and others have been talking up the flaws inherent in presidential political systems like ours.

11:20 pm  •  July 31, 2011

At first glance, it seems less terrible than what was being reported earlier, in that important programs like Medicaid and Social Security are exempted, and defense is as open to cuts as domestic discretionary spending. It’s still terrible, though, and is still the wrong policy to be employed, given high unemployment and negligible growth. The deal — and particularly the way in which the deal was struck — also threatens to make the forcing of the system to crisis points a normal aspect of governance. In other words, it threatens to make the extraordinary act of hostage-taking just part of the cost of doing business in Washington.

10:52 pm  •  July 31, 2011  •  1 note

Steve Benen:

The traditional American model would tell Republicans to win an election. If that doesn’t work, Republicans should work with rivals to pass legislation that moves them closer to their goal. In 2011, the GOP has decided these old-school norms are of no value. Why bother with them when Republicans can force through policy changes by way of a series of hostage strategies? Why should the legislative branch use its powers through legislative action when extortion is more effective?

10:16 pm  •  July 31, 2011

He says that, though the deal is a win for the Republicans’ policy priorities, it leaves open an opportunity for the Democrats:

On Dec. 31, 2012, three weeks before the end of President Barack Obama’s current term in office, the Bush tax cuts expire. Income tax rates will return to their Clinton-era levels. That amounts to a $3.6 trillion tax increase over 10 years, three or four times the $800 billion to $1.2 trillion in revenue increases that Obama and Speaker John Boehner were kicking around. And all Democrats need to do to secure that deal is…nothing.

But, as Ezra points out, that only works if the Obama administration is on board. And that’s a big if. It’s tried to split the tax cuts into those for the rich and those for everyone else, but it’s a distinction lost on the GOP. Moreover, I fear both President Obama and the Democrats will be much more amenable to extending the Bush tax cuts as the 2012 election draws near. After all, they haven’t created jobs or produced growth, and now they want to raise taxes too? Who’s going to vote for that?

4:02 pm  •  July 31, 2011

As I write this, the details are still being worked out. But it looks like the debt ceiling will, in fact, be raised, at the price of a cuts-only deficit reduction plan, with maybe — maybe — some revenue increases in the future. I’m not the world’s greatest expert on political economy, but it’s helpful to remember some basic macro:

Y = C + I + G + NX

That is, national income or GDP (Y) is the sum of household consumption (C), business investment (I), government expenditures (G), and net exports (NX). If you cut G, holding everything else equal, then necessarily Y will fall. It’s possible that cutting G will free up resources that can be more effectively employed in C, I, or NX, but last I checked, there is an enormous amount of slack in the economy in the form of unemployed workers, idled equipment, and vacant office space.

As for the political benefits of cutting G, remember that the single most accurate predictor (PDF) of an incumbent president’s chances at reelection is growth in personal incomes. How likely is it, given austerity budgeting and current economic prospects, that we’ll see a surge in personal incomes by the fall of 2012?

3:33 pm  •  July 31, 2011  •  1 note

It’s easy enough to say that if my preferred economic policy were adopted, everything would be awesome, but in the case of America and Europe, stepping back from another economic calamity really shouldn’t involve much debate.

5:08 pm  •  July 30, 2011  •  1 note

What is, at heart, the cause of this crisis over the debt ceiling? To a first approximation, it’s clearly the Republicans’ decision to take the debt ceiling hostage in order to push an agenda of tax cuts for the wealthy and powerful and austerity for everyone else. But it’s also the result of polarized parties and increasing internal party discipline in the context of divided government. How did that come to pass?

According to Mickey Edwards, at least, it’s the outcome of concentration of power over the electoral and policymaking process in the hands of party bosses. This includes partisan redistricting, excluding the opposition party from adding amendments to legislation, and the transformation of committee assignments into a kind of spoils system for legislators. Frankly, this argument fails the smell test for me: If Edwards has to skip the ideological realignment following the Civil Rights Act and go all the way back to the Progressive era to locate the cause of our current gridlock, his analysis is missing something.

More to the point, Edwards also fails to appreciate that, in spite of the destructiveness found in our current streak of partisanship, Americans are better served by a system where parties represent coherent, distinct alternatives for governing. It’s fashionable in Washington to valorize bipartisanship, but in fact, strong parties make it easier for ordinary people to tell which approach they prefer; otherwise policy issues are decided in backroom deals instead of at the ballot box.

The problem, as the current standoff makes plain, is that strong, ideologically coherent parties are fatal to Madisonian systems of government, where sovereignty is split across several independently elected bodies. If we’re to pull ourselves out of this morass, we have two options: 1) Find ways to dial back partisanship to more acceptable levels, or 2) Develop institutions that make strong partisanship less debilitating. Now, I favor option 2, but that doesn’t mean that option 1 is necessarily a bad way to go. Even in the context of ideological realignment, the Republicans’ obsession with rejecting anything that smacks of compromise seems like an evolutionary maladaptation that deserves to be selected against with extreme prejudice. But we shouldn’t ignore the possibility that strong partisanship is here to stay, and that we need institutions that can accommodate it. The Framers designed a government that assumed human nature was flawed and tried to channel those flaws to productive ends; we should follow that tradition, even if it means rejecting their particular solution.

12:01 pm  •  July 30, 2011