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“Let’s NOT Make a Deal” – Krugman

Via: NYT

To say the obvious: Democrats won an amazing victory. Not only did they hold the White House despite a still-troubled economy, in a year when their Senate majority was supposed to be doomed, they actually added seats.

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But one goal eluded the victors. Even though preliminary estimates suggest that Democrats received somewhat more votes than Republicans in Congressional elections, the G.O.P. retains solid control of the House thanks to extreme gerrymandering by courts and Republican-controlled state governments. And Representative John Boehner, the speaker of the House, wasted no time in declaring that his party remains as intransigent as ever, utterly opposed to any rise in tax rates even as it whines about the size of the deficit.      

So President Obama has to make a decision, almost immediately, about how to deal with continuing Republican obstruction.

How far should he go in accommodating the G.O.P.’s demands?

My answer is, not far at all.

Mr. Obama should hang tough, declaring himself willing, if necessary, to hold his ground even at the cost of letting his opponents inflict damage on a still-shaky economy. And this is definitely no time to negotiate a “grand bargain” on the budget that snatches defeat from the jaws of victory.

In saying this, I don’t mean to minimize the very real economic dangers posed by the so-called fiscal cliff (see photo) that is looming at the end of this year if the two parties can’t reach a deal. Both the Bush-era tax cuts and the Obama administration’s payroll tax cut are set to expire, even as automatic spending cuts in defense and elsewhere kick in thanks to the deal struck after the 2011 confrontation over the debt ceiling.

And the looming combination of tax increases and spending cuts looks easily large enough to push America back into recession.

Nobody wants to see that happen. Yet it may happen all the same, and Mr. Obama has to be willing to let it happen if necessary.

Read more, HERE:

http://www.nytimes.com/2012/11/09/opinion/krugman-lets-not-make-a-deal.html?_r=1&

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personal thought:

I know it won’t happen, but it still would be nice to see Paul Krugman as the new Treasury Secretary.

Common sense, AND back-bone, would be welcomed.

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November 10, 2012 - Posted by | Boehner, deficit reduction, President Obama | , , , , , , , ,

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