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Posted at 9:14 AM ET, 12/17/2010

An incoherent Congress

By Ezra Klein

inccongress.JPG

The tax deal passed last night, and without changes. Liberals don't really like it. Conservatives don't really like it. Even people who supported the deal -- myself included -- don't really like it. It's tempting to say that this broad spectrum of gnawing dissatisfaction just shows that the bill was a true compromise, with everyone getting a little and giving up a bit. And maybe it was. But it was a compromise that said something bad about our political system, not something good: It said we're operating without a clear theory of what's gone wrong in the economy, or how to fix it.

Consider the various narratives of the economic crisis, and what needs to be done about it. Republicans have spent the past year arguing that businesses were uncertain about future tax rates and unsettled by high deficits and were going to sit on their cash until they got a bit more clarity and comfort. So how does last night's deal do on these measures? Terribly. It sacrificed the 10-year fix to the tax rates that President Obama proposed for a two-year fix that retained the breaks for income over $250,000. So there's no certainty in the offing. And it increased the deficit by $860 billion without saying a word about how to pay for it.

Democrats did a little better, but only a little. They believe that there's too little demand in the economy because individuals are still digging themselves out of their debt hole. The fix, at least for now, is for the government to borrow and spend so individuals have time to earn and save. The best way to do that would be to spend on things that we need to do anyway, like infrastructure. But this bill doesn't include any direct spending. The second best way to do that would be to give money to people who will spend it quickly. This bill does do a fair amount of that. The tax cuts for income under $250,000, the payroll tax cut, the unemployment benefits, the expanded Earned Income Tax Credit, and other elements of the legislation will put cash in the hands of the people who will spend it fastest. But the cost of all this was $130 billion in tax cuts for the richest Americans -- and those won't be spent.

Stripped bare, here's what the deal says about the two parties: Republicans care much more about tax cuts for the rich than about any of their specific arguments about what's impeding recovery, while Democrats don't have the votes to really put their preferred policies into place, and so are left settling for policies that they don't think will work that well and, in some cases, don't think will work at all. What we ended up getting was better than I expected, but it's not a deal that anyone with a coherent view of the jobs crisis would've designed.

Photo credit: Melina Mara/The Washington Post.

By Ezra Klein  | December 17, 2010; 9:14 AM ET
Categories:  Taxes  
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Comments

What's interesting about this deal is that it really lays both sides' play books wide open. And it also shows we could have gotten a lot more out of the first Stimulus if we had been willing to go bigger on tax cuts for the rich and let the Republicans take credit for it. Would that have been a good thing? Well, I'll leave the math to others. Of course, when you have an administration who believed (believes?) that Stimulus I was the exact right size, none of this really matters.

Posted by: lucasblower | December 17, 2010 9:27 AM | Report abuse

Ezra opined: "Congress is clueless about fixing the economy"
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So, after two years of Reid & Pelosi stumbling along and ~18% UM, you only NOW figuring this out?

ROFL

Posted by: illogicbuster | December 17, 2010 9:39 AM | Report abuse

illogic

And it sounds like that after 30 years of trickle down voodoonomics failures, you haven't figured out the GOP is even worse.

BTW, I would exclude Pelosi from your rant. I consider her a member of a subset of Dems who actually could improve the economy if more Dems were like her. It's Obama and Reid and other Conservadems who are economically incompetent and who seem to embrace the Ronald Reagan and GOP worldview of things.

Posted by: lauren2010 | December 17, 2010 9:45 AM | Report abuse

Posted by: lauren2010: "BTW, I would exclude Pelosi from your rant. I consider her a member of a subset of Dems who actually could improve the economy if more Dems were like her."
---------------------------------------
Pelosi was in charge of the Stimulus bill. The ecom & UM have gotten WORSE. Objective facts. So, your "consideration" is meaningless in the real world. The DEM congress BLEW it. BTW - DEMS have been runnng congress for 4 years now. Didn't you know that?

Posted by: illogicbuster | December 17, 2010 9:56 AM | Report abuse

Obviously holding national economic policy discussions among politicians, media celebrities, partisan strategists and others with very little useful understanding of economics is not working. I can't say I'm surprised. For two years I've been urging my Representatives and the Whitehouse to gather the best economic minds in the country and have them discuss policy alternatives in public where their reputations would be at stake if they were to offer the kind of patent nonsense that has been passing for economic advice so far. I wish everyone else would lobby for the same. At least it would offer some political shelter for anyone who supports policies that the best economists defend.

Posted by: RandyMoor | December 17, 2010 9:59 AM | Report abuse

The fallacy in your statement is that Congress and economy have ever been allowed to have any relation to each other. It is Congress that forced manufacturing out of this country.

Posted by: PanhandleWilly | December 17, 2010 10:01 AM | Report abuse

Incoherent is a kind way of characterizing this congress. They are locked in a death struggle over ideology and they are willing to compromise the country's future to achieve victory. We spend too much time talking about taxes as a standalone issue rather than talking about the total picture of revenue (taxes) and expenses (appropriations) together. If the Republicans want to reduce revenue, they should be compelled to identify offsetting cuts in expenses. They get by with a bunch of generalities like reducing government, or getting the government off our backs without identifying specific cuts. Eliminating earmarks and freezing government salaries is a bandaid.

Posted by: cdierd1944 | December 17, 2010 10:03 AM | Report abuse

You forgot the other cause of the incoherence, at least on the Democratic side: a weak, clueless leader with no principles who prefers to promote what he sees as his own short-term political gains over the short- and long-term benefit to the country. Obama is wrong, however, abandoning principles won't help him in 2012; instead, it'll keep more liberals home than stayed home in 2010. As a liberal who donated and campaigned for this man, I am utterly disgusted with him & will not vote for him again, even if I have to leave the "For President" box blank on my 2012 ballot. Mr. Obama, just go away, you are done.

Posted by: SageThrasher | December 17, 2010 10:07 AM | Report abuse

While I have been sitting back watching Americans turning into a selfish narccist society of "me, me me" I have only one observation.

Young People:
Do not let these old white Irish and Jewish pundits make you believed that Social Security is in trouble...This is hype coming from a administration, that really never went outside Harvard Law for experience. Obama was never a real community organizer, it was a name he picked, while he did most of his debates with "Ivy League" He did a masterful job of creating his own political goal...but that's when the buck stops!

OBAMA
If you think we want to do away with Social Security...for your modern day (sell out) HCR...then you'll lose.

THE SAND IS DRAWN IN THE LINE BY THE DEMOCRATIC VOTERS.....

WE DO NOT WANT CUTS TO SOCIAL SECURITY AND MEDICAID...FOR THE LIKES OF

OBAMACARE....

THIS GUY IS A NARCCIST

WHAT MAKES HIM THINK WE WANT FDR DREAM TO DIE...FOR HIS EGO OF PASSING HCR...

IF SOCIAL SECURITY GET TOUCHED OR DECREASE

I WILL GO OUT MY WAY TO HELP THE GOP KILL "OBAMACARE"

IF HIS JOB CONSISTS OF BEING JUST A COLLEGE PROFFESOR I BET HE WOULD HAD BEEN A STRONG ADVOCATE FOR SOCIAL SECURITY

OBAMA IS SHOWING RUNNING UP TO BOEHNER WHILE STEPPING OVER PELOSI

PEOPLE ARE TURNING HIM OFF WHENEVER HE COMES ON TELEVISION

I UNDERSTAND THE COMPROMISE FOR THE TAX CUTS

BUT HELL WILL BE PAID

IF HE TOUCHES SOCIAL SECURITY

BUT LEAVE

THAT LOUSY OBAMACARE

GOP - DESTROY HIS OBAMACARE

W...T....F? THIS AFRICAN MAN THINKS HE'S BETTER THAN FDR?

LET HIS KIDS WORKS UNTIL THEY ARE 70

LET HIS WIFE FAMILY WORK UNTIL THEY ARE 70

THIS MAN NEEDS TO BE GONE BY 2012

IF HE ENVOKES ANYMORE SOCIAL CUTS TO THE POOR

HIS GRANDPARENTS ENSTILLED THE ACT OF "SUBMISSION" INTO THAT LITTLE BLACK BOY WHOM WAS ABANDONED BY HIS "INTERNATIONAL" MOTHER WHILE LIVING IN A WHITE WORLD

THERE YOU HAVE THE HISTORY OF THIS BLACK PRESIDENT

Posted by: dove369 | December 17, 2010 10:07 AM | Report abuse

Nothing matters now as far as the Economy goes.
Big Business will Still Claim they have lots of Jobs Available they can't fill because under the table they continue to say, "UNEMPLOYED NEED NOT APPLY!". Anything to Support their Puppets in Congress!

I say, "The 2nd Amendment Option is still on the Table."

Posted by: ddoiron1 | December 17, 2010 10:09 AM | Report abuse

What's wrong with economy? Democrats from a registered democrat where are you?

Where are the prosecutions on the first four of these large problems?

1. The Reagan/ Bush Savings and Loan Heist( millions out of work)
"There are several ways in which the Bush family plays into the Savings and Loan scandal, which involves not only many members of the Bush family but also many other politicians that are still in office and were part of the Bush Jr. administration.

Jeb Bush, George Bush Sr., and his son Neil Bush have all been implicated in the Savings and Loan Scandal, which cost American tax payers over $1.4 TRILLION dollars (note that this was about one quarter of our national debt").

The Reagan/Bush savings and loan heist was considered the largest theft in history at the time. George Herbert Walker Bush then took $1.4 trillion of taxpayers money to cover the theft.
http://rationalrevolution0.tripod.com/war/bush_family_and_the_s.htm


2. The Bush/Cheney Wall Street Bank Fraud on Consumers(millions out of work)
Yes, substantial fraud was involved. For example, mortgage companies and banks used deceit to get people to take on mortgages when there was no possibility that the borrowers would be able to meet the payments. Not only was this fraud, but this fraud depended on government authorities(Bush admin) ignoring their regulatory responsibilities."
http://www.dollarsandsense.org/archives/2009/0709macewan.html

3. Only 3 major Financial Institutions were at risk in spite of what we’re told ?
"There were just a handful of institutions that were terribly weakened. AIG the insurer, Bank of America and Citigroup, \Those three were clearly in very weakened form. Many of the other big banks simply were not.
http://www.democracynow.org/2009/9/10/good_billions_after_bad_one_year

4. We do know it is a good thing Social Security was not under Wall Street control during the Bush/Cheney years. In fact Wall Street has a consistent history for losing money...Yep!

Privatizing Social Security Would Place the Nations Economy at Risk "Social Security privatization will raise the size of the government's deficit to nearly $700 billion per year for the next 20 years, almost tripling the size of the national debt.

Put simply, moving to a system of private accounts would not only put retirement income at risk--it would likely put the entire economy at risk."

http://www.dollarsandsense.org/archives/2005/0505orr.html


5. Still A Bad Idea – Bush Tax Cuts - (DO NOT create Jobs)

The ENTITLEMENT program for the wealthy at the expense of the middle class = tax increases for the middleclass.
http://www.dollarsandsense.org/archives/2001/0301miller.html

Posted by: rheckler2002 | December 17, 2010 10:15 AM | Report abuse

BTW, taxes were set to go up for individuals making 200k and families making 250k, a resurrection of the marriage penalty. Now, after this bruhaha, we need tax reform. May I suggest, as have many, to increase taxes on consumption, particularly on housing, and dimimish them on saving and investment.

Posted by: jibe | December 17, 2010 10:20 AM | Report abuse

Again democrats where are you? Why listen to Jon Kyl and Mitch McConnell for they just duped the democratic party!

Democrats the corp american ceo's don't have the answers for they have had 30 years to keep the economy free of fraud and to keep americans employed. They have failed on both points which leads us to believe they are the fox in the chicken coops.

Posted by: rheckler2002 | December 17, 2010 10:21 AM | Report abuse

Ezra, Add up the stimulus enacted under the Obama administration during the first two years. At least two thirds is a tax cut of one kind or another. Its pretty clear, 40 Senators enacted their minority policy. Bush's all purpose economic solution was "make my tax cuts permanent". The real question is why the Democrats were buffaloed into enacting Republican policy. Look at the big reward from helping out the states. We Dems would have been better off letting the states deal with their own mess.

Posted by: chucko2 | December 17, 2010 10:21 AM | Report abuse

It's not exactly that Congress is clueless. It's really that Congress is bought and influenced by lobbyists who have very self-centered interests that in no real or practical sense coincide with improving the economy on a national scale.

Arguably the most effective way to fix Congress is to cyclically oust incumbents with new candidates in the primary who have a vested interest in their constituents. Granted, finding a candidate who is sincere about changing the broken system seems to be as rare as finding gold. Obama certainly didn't turn out to be this type of candidate, who many (including me) had hoped he would be.

Posted by: DAK4Blizzard | December 17, 2010 10:25 AM | Report abuse

I bet Obama got killing Social Security from his "white" Granny!

Don't forget...he's from Hawaii...Hawaians don't have any Social Security....

Obama grandmother, was a teaparty member long before it was invented. She taught the little "black" grandson. NOt to take anything from the goverment. You can make it, however, his Mom probably told him, don't listen to Mother, I don't have the money to send you to school, got take out loans and grants...which he did

BUT TO UNDERSTAND WHY THIS PRESIDENT WANT TO CUT SOCIAL SECURITY...IS TO UNDERSTAND HE CAME FROM A "DYSFUNCTIONAL FAMILY" OF HAWAII

OBAMA WANTS TO KILL SOCIAL SECURITY BECAUSE HE'S FROM HAWAII....THEY DON'T HAVE RETIREMENT PENSION IN HAWAII

TO THOSE WHOM VOTED FOR A MAN WHOM WAS BORN IN HAWAII....

NOW YOU SEE THE LIGHT

BLACK BOY RAISED BY WHITE RACIST -

NOW YOU SEE WHY IT'S SO HARD TO FIGURE HIM OUT

HIS SISTER SEEMS WELL ROUNDED...GUESS HIS MOTHER HAD NO REGRETS GIVING BIRTH TO THE "INDIA" GIRL...BUT THE BLACK BOY MUST STAY IN HIS PLACE...WITH MY RACIST PARENTS

RECIPE FOR A DYSFUNCTIONAL FAMILY AND COMPLEXITIES:

A BLACK BOY
A INDIAN GIRL
A AFRICAN FATHER
A INDIAN FATHER
A IRISH MOTHER
AND IRISH GRANDPARENTS WHOM ARE SOMEWHAT PREJUDICE

NO WONDER OBAMA NEVER SAID ANYTHING BAD ABOUT THE TEAPARTY MEMBERS....HE CONSIDER IT TO BE NORMAL SINCE HE WAS RAISED BY ONE....

AT THE END I GOT THE FEELING THAT HIS GRANDMOTHER WASN'T THAT PROUD OF HIM, ALTHOUGH SHE WAS QUITE ILL....SHE COULD HAD TRAVEL WITH THE BOY ONE TIME....

I DIDN'T GET THE FEELING OF "LOVE LOST"

HE AT FIRST DIDN'T TELL ABOUT HER DEATH UNTIL IT WAS LEAKED

WHAT A GUY....

BEWARE OF THE MAN WHO WEARS A SMILE WHILE ALL ELSE GO TO HELL IN HIGH WATER AROUND HIM

Posted by: dove369 | December 17, 2010 10:25 AM | Report abuse

"Republicans care much more about tax cuts for the rich than about any of their specific arguments about what's impeding recovery, while Democrats don't have the votes to really put their preferred policies into place, and so are left settling for policies that they don't think will work that well and, in some cases, don't think will work at all."

As for the latter, it is very clear WHY they don't have the votes: the Senate is dysfunctional, and they won't fix it.

Now, why Democrats won't fix the broken Senate--even after it cost them a half-dozen seats and the House--that is a rather mysterious thing...

Posted by: theorajones1 | December 17, 2010 10:25 AM | Report abuse

You still assume that Republicans are bargaining in good faith. They are not. They simply want to wreck the economy because they know that is their best chance of defeating Obama. The more tax cuts they can get along the way, especially for their rich cronies, the better, because that will allow them to push for more budget cuts in social programs, further angering the electorate who will continue to blame Obama for this state of affairs.

Posted by: AuthorEditor | December 17, 2010 10:28 AM | Report abuse

Aye, there's the rub: there is no such thing as policy, only policy within the context of politics. A policy must be enacted in the political arena to claim existence. And since it has been shown that Americans, in general, are not possessed of a coherent political philosophy, our politics (and hence our policies) are bound to be incoherent as well.

It's as American as apple pie.

Posted by: JJenkins2 | December 17, 2010 10:28 AM | Report abuse

"Pelosi was in charge of the Stimulus bill. The ecom & UM have gotten WORSE. Objective facts."

Pelosi was NOT in charge of the Stimulus. Obama and his team devised the stimulus. So already your simplistic claim is BUSTED.

Had Pelosi gotten her way, she and other true progressives would have opted for MORE stimulus.

Secondly, while the "ecom & UM" have indeed gotten worse, you failed to prove in your simplistic response whether there is a cause/effect relationship to your "facts".

The CBO says the stimulus indeed had an effect on the economy and unemployment and that it was a POSITIVE effect.

In sum, without that stimulus, things would have been much worse than they are now and there are numerous more economists that would testify to that than not. Indeed, the stock market has actually done well.

So if you decide to reply to me again, try to come up with some objective analysis (e.g. CBO opinions) to make your case (not just a string of unrelated "facts" that you think are related just because you type them together in the same sentence).

Posted by: lauren2010 | December 17, 2010 10:29 AM | Report abuse

Now congress YOU must stop ignoring those with sound thinking and stop talking amongst yourselves and your special interest money providers. That approach is not working obviously.

How about this?

It's time to invite outsiders into the matter. Special interest money providers and elected officials are NOT outsiders.

http://www.dollarsandsense.org/archives/2010/0510wolfson.html

Myths of the Deficit

By Marty Wolfson

Nearly 15 million people are officially counted as unemployed in the United States, and more than 6 million of these have been unemployed for more than 26 weeks.

Another 11 million are the “hidden” unemployed: jobless workers who have given up looking for work and part-time workers who want full-time jobs. Unemployment has especially affected minority communities; the official black teenage unemployment rate, for example, stands at 42%.


The economic case for how to address the jobs issue is also clear. As Keynes argued during the Great Depression, federal government spending can directly create jobs. And the $787 billion stimulus package approved by Congress in February 2009 did help pull the economy back from disaster, when it was shedding 20,000 jobs a day in late 2008 and early 2009.

Also, cutting taxes for the rich and spending money on wars in Iraq and Afghanistan do not lead to the kind of productive economic growth that generates strong tax revenue.


So financing these by debt does create a real distributional burden: The rich and military contractors benefit, but the losers are those who might be taxed, or those whose government programs might be squeezed out of the budget, because of the need to pay interest on the debt.

Borrowing money to put people back to work does make sense. It helps people most in need, the unemployed. It provides them with income that they can use to pay taxes and to buy goods and services that create more jobs, more income, and more tax revenue.


Indeed, our inability thus far to seriously tackle the unemployment problem is what has worsened the budget problem, as tax receipts have fallen and spending for unemployment benefits and food stamps have risen. An analysis by the Economic Policy Institute reveals that the largest source of the 2009 budget deficit (42%) was actually the recession itself.

We will leave a burden for our grandchildren if we don‘t address the urgent problem of unemployment, if we let parents and grandparents suffer the indignities and financial hardships of lost jobs.


We will leave a burden for our grandchildren if we don‘t rebuild our aging infrastructure, break our reliance on fossil fuels, and provide all our children with an excellent education. It makes perfect sense to borrow money now to address these problems, and we shouldn‘t let myths about budget deficits get in the way of meeting these real needs.

http://www.dollarsandsense.org/archives/2010/0510wolfson.html


Posted by: rheckler2002 | December 17, 2010 10:31 AM | Report abuse

dove369, your caps locked words are not making your statement appear any less racist or any more true.

Unless you have some insightful sources (not hate-raged sites) to share that somehow support these views of Obama's family, I suggest you cut the language. It's immature, and frankly give readers like me the impression that you have no credibility in arguing on the subject.

Posted by: DAK4Blizzard | December 17, 2010 10:32 AM | Report abuse

"Now, why Democrats won't fix the broken Senate--even after it cost them a half-dozen seats and the House--that is a rather mysterious thing..."

I disagree.

First, there is news the Dems will indeed try to fix the senate in January. I doubt they will (because of the second point below). We'll see.

Second, the reason the Senate is designed the way it is (namely, it's rules such as the filibuster or the ability of Senators to put secret holds on actions) is because the Senate has been corrupted by wealthy interests for the express purpose of protecting their interests. Namely, current Senate rules are designed to allow wealthy Senators from BOTH PARTIES to put a stop to any reform they think needs to be stopped if it interferes with their ability to preserve or generate wealth.

Posted by: lauren2010 | December 17, 2010 10:35 AM | Report abuse

Posted by: lauren2010: "Pelosi was NOT in charge of the Stimulus. Obama and his team devised the stimulus. So already your simplistic claim is BUSTED."
----------------------------------------

So, in your crack induced, fantasy world. The House doesn't originate ALL spending bills and, Pelosi HASN'T been Speaker for the last 4 years. Got it.

ROFLMAO @ brain damaged Libtoons

Posted by: illogicbuster | December 17, 2010 11:09 AM | Report abuse

The joke of the day has to be from Former Clinton aide Paul Begala who said about Obama “He could have forced the GOP to cave, created more jobs and done less damage to the deficit. First shotgun wedding I ever saw where the groom held the gun to his own head.” Personally I like the joke people call MSNBC! Guess who's a director of the Federal Reserve Bank, District 2, New York branch, Class B? SURPRISE! SURPRISE! That crooked scum Jeffery L Immelt, CEO OF GE, owner of MSNBC! Recipient of 16 billion dollars! All Obama, all the time. He is a sure source of amusement. If anyone still wondered if Obama had a pair the TSA could not have made it clearer. Obama tells the Dems that if they don't make this sacrifice and vote for a tax bill that they are against and the people who voted for them are against that he will be a one term president. Everyone with half a brain already knows that. After Obama helped so many other Dems lose their job the few remaining ones should help him keep his? Wow even Obama must think his fellow Dems are stupid!As always you can contact me at work http://www.michigan-businessreview.com and yes keep those jokes coming! Yes that does include all Dems I mean only a joke could continue to let Obama **** in their face and tell them its rain!

Posted by: Loxinabox | December 17, 2010 11:44 AM | Report abuse

Harry Reid should get more credit for being the WORST possible Senate leader in a Democrat admninistration. He was the prime mover, or so we are told, behind failing to bring a vote on tax cuts in the summer.

Had this same bill passed in July, it might have made a difference in 5-10 Dem seats in the House. That's not a big number certainly but it would have changed the PERCEPTION going forward.

Reid falling on his face on the omnibus spending bill is just the latest buffoonish measure by a spineless cartoon character that has been hung around Obama's neck!

Posted by: 54465446 | December 17, 2010 12:08 PM | Report abuse

Understanding the problems of the US economy is not hard. Fixing them is not.

1) Aggregate demand and population dynamics. The world's population cannot consume nearly as much as its current capacity can produce. This is due to cheap capital and cheaper (foreign) labor.

2) Balance of trade and Faustian bargains with foreign nations' elites. The US no longer makes enough goods to compensate for its own consumption, and borrows the money from foreign countries who know that ultimately we will not pay it back, but buy our debt anyway as a means of keeping their populations placated.

Both trends will achieve their long-term trend lines in America by a continued painful reduction in the standard of living for the middle class in this country.

One way out of this dilemma is to commit enough resources to energy independence to make it happen. But no, Tuvalu might sink so we can't do that.

Another is to re-erect the trade barriers that we have spent the last 40 years breaking down. Economists regard free trade as good for overall growth, and it is, but the tradeoff is that capital pursues the cheapest labor. That ain't in the USA. Remember, an economist views leisure time as having economic value. It does, unless all your time is leisure time and then you can't afford your life.

All of the problems that confront us have logical causes, and logical, but politically impossible, solutions.

Posted by: dumndummer | December 17, 2010 12:52 PM | Report abuse

This whole shtick does not make any sense. Rather, this deal is triumph of Obama, Congress and American Politics in general. Granted it is about deficit funded tax cuts. But in any case Liberal Stimulus was to be deficit funded too. So what are you talking non-sense?

Turn Ezra and look around the world. Are your European friends able to solve any of their problems? Failure after glaring failure there. What about the largest Democracy in the world - India? They are not even able to conduct a single day in Parliament for the whole session and everyone is wondering what the heck those politicians are doing.

This is so un-American sentiment and the exact 'sanctimonious' statements Obama derided other day. You, Tom Friedman; you guys need to come down from your pedestal and get into the mud.

As TDR said, Obama and Congress are men in the Arena and this is their good moment; you Liberals suck and don't even know how to celebrate what you have achieved here. Pity.

Well, do carry the burden of whole America everyday and don't sleep....

Posted by: umesh409 | December 17, 2010 1:00 PM | Report abuse

PanhandleWillie, you are so right. The dems and their stupid EPA have ruined this country financially. We MUST bring manufacturing back to the US or millions will be jobless forever.

Thank goodness, Pelosi will have to be silent in the next congress. She is an absolute albatross around our necks. She and her progressive/marxists have undone us.

I am glad the bill passed - it was the last chance for unemployment benefits extension. However, I kind of wish the naysayers could have seen THEIR TAXES INCREASE come Jan 1! It would have served them right and would have been on the backs of the middle and lower classes - not the rich!! The rich would have only given up 2%. The MSM lied to you!

So sad so many listen to the MSM and the WaPo and can not think for themselves.

Posted by: annnort | December 17, 2010 1:22 PM | Report abuse

Illogic

The tax deal is the latest example of a deal forced onto pelosi.

Just because she is speaker does not mean she gets her way.

The CBO and even many republican governors say the stimus created millions of jobs. The CBO also says GDP was positively effected. But despite all that, you want us to believe you somehow know better.

Posted by: lauren2010 | December 17, 2010 1:42 PM | Report abuse

Obama finally realized what most of us realized long ago. Congress is irrelevant.

Posted by: citizen4truth1 | December 17, 2010 2:07 PM | Report abuse

"It said we're operating without a clear theory of what's gone wrong in the economy, or how to fix it. "

Or that we may have a clear theory about what's gone wrong with the economy (a housing bubble and the excessive debt associated with it) that doesn't lend itself to a legislative solution involving government spending or tax policy.

I.e. we may just have to suck it up until consumers deleverage on their own and the business cycle comes back around. If the best and the brightest were going to "fix the economy" they would have done so in 2009.

See David Stockman:

"TFT: Should the government provide more stimulus for the economy, or cut spending to bring the deficit down?

DS: We are not in a conventional business cycle recovery, so stimulus is futile and just adds needlessly to the $9 trillion of Treasury paper already floating dangerously around world financial markets. Instead, after 40 years of profligate accumulation of public and private debt, and reckless money-printing by the Fed, we had an economic crash landing, which left us with an enduring structural breakdown, not just a cyclical downturn.

In effect, we undertook a national leveraged buyout, raising total credit market debt to $52 trillion which represented a 3.6X leverage ratio against national income or GDP. By contrast, during the 110 years prior to 1980, our aggregate leverage hugged closely to a far more modest ratio at 1.5 times national income.

The only solution is a long period of debt deflation, downsizing and economic rehabilitation, including a sustained downshift in consumption and corresponding rise in national savings.

And a key element of the latter is a drastic reduction in government dis-savings through spending cuts and tax increases — and these measures need to start right now. Keynesian policymakers who say wait for the midterms to address the deficit are like battleship admirals: They are fighting the last war with the same failed strategy that gave rise to our current predicament."

http://www.thefiscaltimes.com/Issues/Budget-Impact/2010/10/06/David-Stockman-US-Is-in-Race-to-the-Fiscal-Bottom.aspx

Posted by: jnc4p | December 17, 2010 2:22 PM | Report abuse

jncp wrote:

"The only solution is a long period of debt deflation, downsizing and economic rehabilitation, including a sustained downshift in consumption and corresponding rise in national savings."

Savers will be clearly hurt the worst in the future because inlfation will eat them alvie, and since the economy is about 60-70% based on consumption of one sort or another, any downshift in consumption would be disastrous for the nation as a whole.

Posted by: 54465446 | December 17, 2010 3:34 PM | Report abuse

annort wrote:

"The dems and their stupid EPA have ruined this country financially. We MUST bring manufacturing back to the US or millions will be jobless forever."

The leader in the clubhouse for nonsensical statement of the day, backed by absolutely nothing in the fact category.

Posted by: 54465446 | December 17, 2010 3:39 PM | Report abuse

I generally agree with Stockman (jnc4p's quote); I would however argue that government action could be useful, just not the government action we are seeing.

The energy sector, for example, is currently artificially underactive; an energy policy, any energy policy, would change this to significant benefit.

There are some guerilla protectionist policies that could be somewhat beneficial as well.

Posted by: eggnogfool | December 17, 2010 5:07 PM | Report abuse

"The tax cuts for income under $250,000, the payroll tax cut, the unemployment benefits, the expanded Earned Income Tax Credit, and other elements of the legislation will put cash in the hands of the people who will spend it fastest. But the cost of all this was $130 billion in tax cuts for the richest Americans -- and those won't be spent."

Any pathological liar who says this obviously doesn't make $250k or know anyone who makes $250k.

Posted by: krazen1211 | December 18, 2010 12:34 PM | Report abuse

"Pelosi was in charge of the Stimulus bill. The ecom & UM have gotten WORSE. Objective facts. So, your "consideration" is meaningless in the real world. The DEM congress BLEW it. BTW - DEMS have been runnng congress for 4 years now. Didn't you know that?"

Lauren and company are obviously horrendously unaware that President Reagan blessed us with tremendous economic growth and that this guy obama is forcing us to tread water.

Posted by: krazen1211 | December 18, 2010 12:36 PM | Report abuse

"Pelosi was in charge of the Stimulus bill. The ecom & UM have gotten WORSE. Objective facts. So, your "consideration" is meaningless in the real world. The DEM congress BLEW it. BTW - DEMS have been runnng congress for 4 years now. Didn't you know that?"

Lauren and company are obviously horrendously unaware that President Reagan blessed us with tremendous economic growth and that this guy obama is forcing us to tread water.

Posted by: krazen1211 | December 18, 2010 12:36 PM | Report abuse

It is actually worse than Klein describes here. Much worse. A few other commenters have already mentioned the main reason why: the Republicunning are NOT negotiating in good faith.

Rather, as others have already pointed out, as McConnell even made clear months ago, they are out to make President Obama a one term President. They don't care how much long term damage they do to the whole country in the process.

Why, they don't even care how much long term damage they do to the entire world. That is how stubbornly short-sighted and selfish they are.

Posted by: Syllogizer | December 18, 2010 5:05 PM | Report abuse

Ezra, You are entitled to your own opinion but not your own facts. "The cost of all this was a $130 billion in tax cuts for the richest Americans. No one received tax cuts. The tax rates just stayed the same! As for the cost to Government it cost them nothing. The truth is the Government spent more money than it had. This would be like my son going to Best Buy, coming home with $500 television but he only had $400 so if I don't give him $100 it will COST him $100!! It is NOT the Governments money! It belongs to the people who earned it.

Posted by: biestsr2 | December 18, 2010 6:16 PM | Report abuse

biestsr2, it's not that hard to understand. The new law lowers the 2011 rates below the previous 2011 rates set by the Bush tax laws. That's a cut.

Posted by: RandyMoor | December 19, 2010 11:09 PM | Report abuse

Hey Dove...careful, you're bigotry is showing!! Whether you are black or white, you are still very bigoted. Coming from a biracial family does not make you dysfunctional - I have three daughters (all products of our biracial marriage). They all have the same father and same mother. They were brought up to be proud of each race (even the 1/4 Native American) that their mother is.) One just graduated from nursing school and is now a nurse; another is graduating with a Psych Degree and going into nursing school,eventually hoping to be a research nurse; the third, has four kids, a husband, and on unemployment (which she hates). And in the 35 years we've been married, we never made over $50K a year. Our parents were from the South (both sides) but they loved our kids. Mine were Republicans, some bigoted (even to the point of one being a Grand Wizard in his town). This all said: just because you're biracial, have family who are poor, or bigoted, it does not mean that you "kow-tow" to the other race, that you are not proud of what your are or that you will take into their bigotry. So, you need to get a new hypothesis! It doesn't hold up and basically comes from an uninformed 1950's type education and really has nothing to do with whether Obama makes a good president or not.

Posted by: Indy60 | December 20, 2010 12:40 PM | Report abuse

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