By the end of the day, Congress and the President will have enacted legislation to take considerably more money out of the economy than the Stimulus bill put into it in February 2009 with tax cuts and infrastructure investments to offset the effects of a looming Depression.
The $787 billion back then is dwarved by the estimated $2.5 trillion in cuts to the budget over a decade by an agreement that will be passed as the price of raising the debt ceiling.
What’s changed since then is not the slow, precarious recovery of the American economy but the phenomenon of a social movement transformed into a political force by the 2010 elections that, in the words of a New York Times editorial, has led to “a nearly complete capitulation to the hostage-taking demands of Republican extremists...
"Reasonable people are forced to give in to those willing to endanger the national interest.”
This is happening despite the warning of the bipartisan Bowles-Simpson commission, which has advised against spending cuts for at least a year to protect the economic rebound.
"Their fear, and the fear that I share,” says Senate Majority Whip Dick Durbin diplomatically, “is that if we make spending cuts at this point, it will not help economic recovery."
Robert Reich, who was secretary of labor under Bill Clinton, puts it more flatly: “The heinous deal is preferable to economic catastrophe. The outrage and shame is it has come to this choice.”
Paul Krugman, as is his wont, takes it to the extreme by calling it “a disaster, and not just for President Obama and his party. It will damage an already depressed economy; it will probably make America’s long-run deficit problem worse, not better; and most important, by demonstrating that raw extortion works and carries no political cost, it will take America a long way down the road to banana-republic status.”
The level of outrage is not the point here. The important question is how did government with a gun to its head become the norm, and what are the President and his party going to do to change that?