"Krugman is a political rookie," by Deaniac (excellent blog post!)

Liberal_Stalwart71

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Mon Aug-01-11 01:01 PM
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"Krugman is a political rookie," by Deaniac (excellent blog post!)

Edited on Mon Aug-01-11 01:33 PM by Liberal_Stalwart71

A well thought out, well-reasoned argument

Paul Krugman is a Political Rookie. Or How Barack Obama Left John Boehner Holding the Teabag, Again.

<snip>

Paul Krugman is a political rookie. At least he is when compared to President Obama. That's why he unleashed a screed as soon as word came about the debt ceiling compromise between President Obama and Congressional leaders - to, you know, avert an economic 9/11. Joining the ideologue spheres' pure, fanatic, indomitable hysteria, Krugman declares the deal a disaster - both political and economic - of course providing no evidence for the latter, which I find curious for this Nobel winning economist. He rides the coattails of the simplistic argument that spending cuts - any spending cuts - are bad for a fragile economy, ignoring wholeheartedly his own previous cheerleading for cutting, say, defense spending. But that was back in the day - all the way back in April of this year.

I am not kidding. Nor exaggerating. I will show you exactly how that happened if you bear with me a little bit.

Here's the quick and dirty (The White House has a summary here and more details here):

$900 billion in initial cuts (below CBO's baseline) through capping discretionary spending (meaning that nothing is being cut right now). Both parties had largely agreed to these cuts during the debt talks. This is really only about $750 billion of actual cuts; the other $150 billion comes from saving on interest payments on the national debt. This also raises the debt ceiling by $900 billion.
Initial cuts do not include Social Security, Medicare, Medicaid, or programs for the poor. It actually increases Pell grants - even in Boehner's bill.

$350 billion (almost half of these cuts) in cuts in the base defense budget - these are not simply the savings coming from winding down the wars. This actually cuts the base defense budget.

Specifically protects the President's historic investment in Pell Grants.
Sets up a bipartisan "supercommittee" of Congress (half and half Democrats and Republicans) to achieve $1.5 trillion in additional deficit reductions with both tax reform and entitlement reform on the table.

They must achieve at least $1.2 trillion in reduction or automatic cuts set in of that amount, spread equally between security (Defense and Homeland Security, mainly) and domestic spending set in. Social Security, Medicaid, low-income assistance programs and Medicare benefits are exempt (yes, I know you can swear you read or heard on the ether that it is not so, but it is. Follow along below). These are the so-called "triggers."

Either way, the debt limit goes increases additionally by a commensurate amount to the cuts (at least $1.2 trillion, at most $1.5 trillion).

A balanced budget amendment is guaranteed a vote, but not passage. But Congress can avoid both the supercommittee requirement and the alternate automatic cuts if it sends a balanced budget amendment to the states (which. will. never. happen. - because Republicans won't agree to anything balanced in terms of the balanced budget amendment.)

Remember that the President can still veto anything coming out of this committee and Congress (in which case the triggers go into effect).

Now let's get to the fun part: the triggers. The more than half-a-trillion in defense and security spending cut "trigger" for the Republicans will hardly earn a mention on the Firebagger Lefty blogosphere. Hell, it's a trigger supposedly for the Republicans, and of course, there's always It'sNotEnough-ism to cover it.

No, the loudest screeching noise you hear coming from Krugman and the ideologue Left is, of course, Medicare. Oh, no, the President is agreeing to a Medicare trigger!!! Oh noes!!! Everybody freak out right now! But let's look at the deal again, shall we? From the White House fact sheet, here is what the President actually agreed to.

Consistent With Past Practice, Sequester Would Be Divided Equally Between Defense and Non-Defense Programs and Exempt Social Security, Medicaid, and Low-Income Programs: Consistent with the bipartisan precedents established in the 1980s and 1990s, the sequester would be divided equally between defense and non-defense program, and it would exempt Social Security, Medicaid, unemployment insurance, programs for low-income families, and civilian and military retirement. Likewise, any cuts to Medicare would be capped and limited to the provider side.

Read that again.

That's what the media and the whiners are not telling you. The President agreed to no Medicare benefit cuts in the "trigger." None. The cuts, if they automatically happen, would go to whom? The providers. Who are these providers? Doctors, hospitals, clinics, Medical device makers, service providers, drug manufacturers. Who do you think they mostly donate to in the political season?

</snip>

Much more at the link:

http://www.thepeoplesview.net/2011/08/paul-krugman-is-political-rookie-or-how.html?spref=fb