Monday, August 1, 2011

Krugman Slams Budget Deal: 'There's No Light at the End of This Tunnel'





08.01.11 - NYTimes
If I Were In The House...

Paul Krugman writes this morning:

I guess I have to be explicit at this point: yes, I would vote no.

What about the catastrophe that would result? Several thoughts.

First, what I keep hearing from people who should know is that Treasury won’t actually run out of cash tomorrow, that it still has a few more days.

Second, the people who claim that terrible things would immediately happen in the markets also claimed that there would be a big relief rally once a deal was struck. Not so much: the Dow is down 121 right now.

Third, the idea that a temporary disruption would permanently damage faith in US institutions now seems moot; if you haven’t already lost faith in US institutions, you’re not paying attention.

Fourth, those legal options are still there. Obama can move now; and even if he eventually loses in the courts, that gives him time.

Sure, it’s risky. But the whole situation is immensely risky, thanks to the extremism and bloody-mindedness of the right. There are no safe options, and trying to play it safe when there is no safety lands you, well, where Obama is right now.


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