But a slowing economy will hurt the President, who just happens to be from the other party. You assume far too much good faith on the part of congressional Republicans.

RA can you please disclose whether or not you receive money from Big Pharma? Because you're doing a hell of a job driving me towards despression medication.

One has to remember that the group of Republicans pushing for more cuts ran on a campaign saying that they would cut Federal spending.

This is completely different than what the Senate will pass, and then it has to go the House-Senate Conference for a unified agreement, to then be passed by both chambers.

R.A.,
Remember what Bismark said about law making and sausage making.

How about we talk about the great Durable Goods data released today?

Regards

If cutting $61 billion off a $1.5 trillion deficit is that traumatic to the economy, we have far bigger problems.

What does it say about our economy if it is dependent on serial deficits of 10% of GDP just to stay on life support? And how many years into the alleged recovery do we have to wait to get the Keynesians to approve of any slight nod toward fiscal responsibility?

As a non-US observer the GOP looks increasingly depressing. Nakedly political moves are one thing but it had always seemed that appealing to the voters, as opposed to the faithful tea-partiers, needed some sense.

And with the comments elsewhere suggesting that Democrat politicians are wealthier and better-educated we seem to have a curious inversion - the GOP represents not the traditional rich but poor angry people with sub-normal IQs. Does this mean they will soon start to favour more benefits?

Are you in the tank for the Democrats? All you said is true of the Republicans, but the Democratic President just proposed a budget that does and does not do the same things you chastise the Republicans for. Both parties deserve equal disgust for their management of our country's finances. I can certainly tolerate a little regular dose of left of center, but you and Democracy in America maybe straying a little too far, too often. At least I have Buttonwood to remind us all of the economic ramifications of the social policy advocated by you other two. On a side note, I am in finance, and while easy money policies may good for financial markets short term, they can create asset bubbles over time. Professionals in my industry are terrified that the Fed is feeding another one, and our clients will be creamed again. I get the queasy feeling the Fed is sticking to their current plan because that is all they know to do. Print money, not print money. We need a new plan. OK, print more money.

My math says it costs $175 million per tankers.

WASHINGTON (AP) -- After a decade of delays and embarrassing missteps, the Air Force is poised to award one of the biggest contracts in military history -- a $35 billion deal to build nearly 200 giant airborne refueling tankers -- to either Chicago-based Boeing Co. or European Aeronautic Defence and Space Company.

Would Ike be branded as a liberal today?

Regards

Depressing, sure, but not surprising. There wasn't really much doubt that the current batch of Tea Party Republicans didn't actually care about the deficit. They campaigned not on any kind of actual plan, but on hitting an arbitrary $100 billion year one mark that explicitly ruled out cuts to entitlements, cuts to defense, and tax increases.

The most telling fact is that the deficit commission never even approved its own report, with infighting preventing an actual recommendation. Don't hold your breath waiting for anti-deficit rhetoric to turn into anti-deficit action.

R.A., everything you are saying about the Republicans is true (with the probable exception of the damage estimate). But...

Medium-term, the government needs to shrink, or it's going to destroy us. The Republicans, while they are addressing the least important part, are at least insisting that the issue has to be addressed. The Democrats are still stuck at "no, growth of government is just fine".

It's a reasonable strategy to get the process started AT ALL, with the least painful cuts, and then steer it to focus on what really needs dealt with.

And by the way: How many more years do you think that the US can run a deficit of 10% of GDP? Two more years of deficits of 10% of GDP, just because interest rates are currently low, is the height of irresponsibility. We have to pay all that back eventually, or else we have to pay interest on it forever. When interest rates rise (and they will eventually), we're going to get creamed by the debt we've built up over the last three years.

"America doesn't face a short-term fiscal crisis; its debt is dirt cheap."

1) It's debt is dirt cheap because the Dirty Fed is printing money to buy every Treasury bond in sight.

2) How long will the debt stay dirt cheap if we keep running deficits of 10% of GDP and everyone throws a hissy fit if you propose cutting that by even 0.4% of GDP?

Hedgey, those tankers are for defense, and therefore, by definition, a good thing to spend money on. It's the next thing to treason to suggest cutting any defense spending -- even when it's the military saying that they don't need something.

To your question, no, Ike would not be branded a liberal today. He would be branded a socialist, if not a communist. Just think of the Interstate Highway System -- obviously a horrid waste of taxpayers money -- that he advocated. (For that matter, Reagan would, too.)

@WC

1) Core inflation is still in the basement, so all this gold standard advocacy isn't necessary.

2) The debate here isn't about the raw number that's being cut from the deficit. The "hissy fit" is over the timing of the cuts (too soon) and their details. The problem is not that the Republicans want to reduce the deficit, it's that they've hyped up the issue and then responded with a laughably unserious plan to address it. It's the equivalent of an obese person deciding to cut off their foot to lose weight while adamantly refusing to diet and exercise.

Its important to remember a few things about those Republicans of the T-Party persuasion:

They read the Naked Communist and the 5000 Year Leap and think its true.
They read Atlas Shrugged and The Road to Serfdom and don't understand what they mean.
They listen to Beck and Rush and think they are informed.
They think they are patriots when they are really Koch's puppets
They want to cut spending and roll back the government but have no idea of the consequences of their actions.
They want to implement spending cuts and don't understand economic theory.

....but the Republicans accept that this is the price of staying in power so apparently that's all ok.

"Nuts, I've maxed out my credit card, and it will take me years to pay back this crippling debt; I've got to cut my current expenses. Let's see: my word, look at how much money I spend commuting to work every day. If I quit going to work, I could save HUNDREDS a year! Boom, problem solved."

As far as I can see the US will continue to enjoy cheap debt until another currency backed by a huge market is able to establish itself as a plausible reserve for low-risk investment around the world. The Euro, which until this year would have easily filled the requirement, has helpfully eliminated itself by failing to enforce its own policies about members' spending habits. The Yen, like the Japanese economy, seems to be in the middle of a very extended hangover. And the Remnimbi, probably the only other currency backed by a large enough economy to suck up a big part of world demand for low-risk bonds, is insufficiently transparent.

This doesn't mean that we don't have to address our deficit spending issues, but it does mean that in the short term we are not at risk of a crisis brought on by demands for higher yields on treasury bonds. The world has to put its money somewhere, and even if the US is seeming increasingly irresponsible it still looks like a safer bet than any other big economy in the world.

Wow. RA says the house is so far underwater we shouldn't worry about putting a vacation on the credit card. After all, the vacation will keep the family spending up a little longer.

Wow.

@ The Critton:

Pitch-perfect sir. Remember that the cuts will work best if you stop buying a public transit pass to get there. You will probably then have enough cash to airbrush your Hummer.

Yes we should be running a huge deficit and yes we should hugely cut spending.

Haven't we seen widely accepted Keynesian models before that predict disaster without government spending and good times with lots of government spending?

Don't you deal with a long-term fiscal crisis by starting to cut spending?

I agree that the cuts the Republicans are proposing are symbolic, vindictive, meaningless, or all three. The Democrats are essentially proposing no cuts at all, so which is better? None of it makes a bit of difference, short-term or long-term, when the major part of the budget, defense, entitlements (including the new health care), and debt service are automatically off the table. We're in for two years of grandstanding and obstructionism at a minimum. After 2012, it's possible that one party (I wouldn't bet on which at this point) will control both houses of congress at which point they'll ram the symbolic parts of their agenda down the other's throat, while still not touching the largest part of the budget.

We live in a representative democracy. At this point, Americans want the government to do lots of things for them, from fighting off terrorists to paying their doctor's bills, and they want someone else to pay for that stuff. Their congresscritters are simply voting as they were elected to vote -- for more stuff for everybody without raising taxes. It's going to end in severe inflation and there's no way around it at this point. If the country is a big canoe with Democrats paddling furiously on one side and Republicans paddling just as furiously on the other, the canoe is now at the top of Niagra falls, and it's going to the bottom no matter who paddles harder.

We've passed the point of no return and all we can do is hang on for the ride. The law of gravity is stronger than even the laws of congress. The liberals hoped for change when Obama was elected. The conservatives hoped for their own sort of change when they swept the House this fall. What we got instead was symbolism and grandstanding on both sides, along with the occasional over-publicized vote on some petty partisan issue. The reason nothing meaningful has been done isn't that one party is right and the other is obstructing them. The reason for that is that the preponderance of citizens want lots of stuff from the government and don't want to pay for it. In a democracy, the people are allowed to make foolish choices. The selfishness of the self-absorbed boomer generation is now in control of the country and we are seeing the results.