Last Entry on the Debt Ceiling, I PROMISE (For Now)

New York Times: Comparing Deficit Reduction Plans
It's a good graphic illustrating the '11th Hour Plan' and previous proposals.

Two key points I drew from the debt ceiling 'compromise':

• 12-person bipartisan Congressional committee to draft a proposal reducing the deficit. A combination of revenue-raising (taxes), tax code-rewriting, and spending cuts can be used. The rest of Congress can vote either to pass or deny it, but no amendments can be made.
• Obama now has, essentially, complete authority to raise the debt ceiling in both phases. Congress can vote down his request but he can still veto it.
  

At least Medicaid and SS are off the table. I feel a little more relieved seeing that.

It seems like what this bill mostly does is delay the inevitable goal--reducing the deficit. A measure in exchange for securing the more immediate need to raise the debt limit? In a few months, maybe weeks, the second part of the wrangling saga will continue...

I hate talking about 'winners' and 'losers' in this because it characterizes the entire situation for what it should least resemble: a competition. But I can't say it puts Obama in a favorable position when it comes to his reelection prospects, at least for now. Liberal media and the progressive caucus are railing against it as being a concession toward fiscal hawks and more generally, the GOP. Ultra-conservative Republicans can still go back to their constituents and tell them they voted against this bill. They stuck to their guns. If the economy begins recovering I think Republicans will not hesitate to take credit for being the ones to prevent raising taxes.

I honestly can't see this bill stimulating the economy though. At best, the markets will continue to be shaky. Investors will not ignore the elephant in the room, which is US public debt and the ever-present threat of a credit downgrade. At worst, with caps on spending the economic recovery will continue to be weak. How can there be job creation when there is not a Keynesian-like outlet to support hiring efforts? And if come 2012, the economy is still the way it is, Obama and the Democrats are going to be in trouble...