AS I write this the “debt agreement” talks continue. This refers to a legal requirement that the Federal government faces. Briefly, if Congress does not give legal permission to borrow then the government will “run out” of money. The main part of the talks seem to be, according to the Mass Media reports, how much to reduce federal spending, and/or how much to increase revenue by increased taxes.
Basically both sides (the Republican House of Representatives) and the President agree that far too much is being spent. Read this again, please. Until a short time ago, and maybe even now (officially), the administration has been following a Keynesian theory. This means that spending (and usually borrowing), and then more spending, and then even more spending, by the Federal government is THE way to recover from a depression/recession. The theory is utter lunacy, of course, but this in not my point.
For all of his administration Bam-bam has been demanding that his policy be followed. This stimulus was supposed to create a nation wide sustained and effective demand. According to Keynes, reduction of spending is NEVER to be done. Yet here is the president saying, “Of course I want to cut spending, just as you do!”
In other words, the president has completely abandoned his entire economic core policy. He may as well register as a Republican. And NO Republican politician announces this. Bam-bam admits that he got it all wrong, and no commentator notes the fact. No political opponent uses the opportunity to weaken him.
What is going on here? One side has won, at least in principle, and, apparently they are too stupid to notice. Perhaps it is that the Republicans have, for so long, failed to seek victory that they no longer can recognize one when won is given to them.
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