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Five hypotheses about the next two years

Stan Collender games out the next few years:

1. Unless the White House is willing to capitulate completely, fiscal policy simply won't be available to deal with the economy.

2. We need to hope (prayers might also be useful) that the monetary policy options available to the Federal Reserve will be far more effective than many think they are going to be.

3. The biggest fights in Washington over the next two years will be over anything having budget implications. These are likely to be epic battles with religious fervor the likes of which haven't been seen in Washington since prohibition.

4. Multiple government shutdowns will be threatened; more than one is likely to occur.

5. It's not at all clear that financial markets have priced in the disruptions and extreme uncertainty that are about to occur.

I think #3 is wrong: I doubt any battles over the next few years will be vastly more bitter than health-care reform, say. As for #4, I think the chances of a government shutdown are a lot lower than they would've been if Republicans had taken the Senate, though obviously not zero. And I think #5 is all sorts of true.

By Ezra Klein  | November 3, 2010; 12:02 PM ET
 
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Comments

I don't understand point #1. How will the White House capitulating cause fiscal policy to be available to deal with the economy?

Posted by: thehersch | November 3, 2010 12:06 PM | Report abuse

"As for #4, I think the chances of a government shutdown are a lot lower than they would've been if Republicans had taken the Senate,"

---------------------------------------
Ezra, I'll clue you in since you are young and inexperienced. It is MORE likely since the Repubs don't hold the Senate. Why? Because, the Dems now still control most of the gov and the Repubs aren't the majority party in Congress. This will have VAST implications in 2 years as the repubs will be positioned as the minority party to the incumbent Dems.

Think about that for a bit and let me know if you see the significance. You might have to actually experience it to understand...

Posted by: illogicbuster | November 3, 2010 12:15 PM | Report abuse

Oh, buck up, bucko. The faces of the Republicans over the next 2 years will be the leaders of the House: Boehner, Bachmann, Bozo. What more could you ask for?

Posted by: ostap666 | November 3, 2010 12:32 PM | Report abuse

According to multiple sources on election night coverage, the Dems are going to make a deal on extending tax cuts.

Of course, this is going to occur six months AFTER it would have done them at least some good in the general election.

Very smart, don't you think?

Posted by: 54465446 | November 3, 2010 12:41 PM | Report abuse

Don't forget that the Republicans will also hold hearing after hearing 'investigating' Obama's birth, friends, supporters, employees, family, and etc. Think back to Clinton.

Posted by: hunterda98 | November 3, 2010 12:51 PM | Report abuse

Don't forget that the Republicans will also hold hearing after hearing investigating Obama's birth, friends, supporters, employees, family, and etc. Think back to Clinton.

Posted by: hunterda98 | November 3, 2010 12:52 PM | Report abuse

hunter:

I hope that you're not right, but I concede that you may be.

Posted by: 54465446 | November 3, 2010 12:59 PM | Report abuse

I'm not sure even if the president capitulates completely that fiscal policy will be available to the U.S. If ultimate goal is to defeat Obama while letting the country go to hell so Obama can get the blame (as seems to have been the strategy up until now) and if some of the new representatives are as stridently doctrinaire as they seem no compromise that allows fiscal policy seems likely.
And no, despite Hayak and Friedman, monetary policy does not always work.

Posted by: patrick27 | November 3, 2010 12:59 PM | Report abuse

I think that the best strategy for Democrats is to have Barack Obama veto any tax cut that comes out of the lame duck session.

This will then set up a huge fight in January, but if Obama stays strong, any new tax bill will require a two thirds vote, thus keeping the Congressional Democrats in the game.

Posted by: JimHannan | November 3, 2010 1:01 PM | Report abuse

For the record, #1 and #2 aren't "hypotheses" in any sense.

Posted by: paul65 | November 3, 2010 1:14 PM | Report abuse

I believe "capitulate completely" in #1 means stimulus that's 100% tax cuts. If the White House were willing to do that, I think it could happen, but I don't think the White House would (or should) do that.

#6 (or perhaps a corollary to #s 1 & 5): if the economy goes from negligible growth to contraction we can kiss prosperity goodbye. The Republicans have managed to discredit the few things that government can do to improve the economy and simultaneously blame the government for not improving the economy.

Posted by: dollarwatcher | November 3, 2010 2:44 PM | Report abuse

Rep Issa was on MSNBC mid day today and stated that he wouldn't issue one subpoena to the White House. He'd just ask that his 300+ requests for info be finally answered. Maybe now the White House will comply so he can do his job of oversight. Exactly how is it legitimate for the Dems in the House to conduct legitimate oversight on a Democratic President? Same would go if/when republicans in office. That would have stopped Bush/Cheney from many of their theatrics during the earlier part of the previous decade. I'd be all for allowing the party that does not hold the White House to have more authority to (in a true check/balance way) hold the executive branch more accountable.

Posted by: visionbrkr | November 3, 2010 8:42 PM | Report abuse

"Maybe now the White House will comply so he can do his job of oversight."

Gosh, you make Rep. Birfer sound so reasonable. What a surprise.

Posted by: pseudonymousinnc | November 3, 2010 10:41 PM | Report abuse

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