Charles Krauthammer says that Obama has conned Republicans into agreeing to a second stimulus even bigger than the first. Democrats are too stupid to see this (and Republicans are even more stupid, presumably, since they are the victims).
Barack Obama won the great tax-cut showdown of 2010 - and House Democrats don't have a clue that he did. In the deal struck this week, the president negotiated the biggest stimulus in American history, larger than his $814 billion 2009 stimulus package. It will pump a trillion borrowed Chinese dollars into the U.S. economy over the next two years - which just happen to be the two years of the run-up to the next presidential election. This is a defeat?
He's right about the Democrats' stupidity, but this is not Krauthammer at his most lucid.
Yes, Democrats are fools to tear their hair out over this deal, which gives them most of what they wanted: the middle-class tax rates, unemployment benefit extension, payroll-tax cut, and so on. They compound the idiocy by advertising higher taxes on the rich as their core objective. Forget relieving poverty, widening access to health care, improving opportunities for the disadvantaged. What matters more than any of that is sticking it to "millionaires and billionaires" (two-earner households making more than $250,000). You bet, the Democrats are acting like fools.
But this stimulus is not bigger than the first, not even close. Two-thirds of its "cost" is keeping tax rates where they currently are. There is no new stimulus in failing to put taxes up--in forgoing a drastic fiscal tightening that nobody wanted and nobody expected. Unlike Krauthammer, I think further short-term stimulus makes sense, so I welcome the $300 billion (over two years) or so of extra stimulus in the deal. Oppose this if you like, but please don't call it a bigger stimulus than the first.
In any event, the key question is this: does Krauthammer oppose the deal? Having declared Obama guilty of a massive swindle, and recalling that he is opposed to all of Obama's sinister purposes, Krauthammer is obliged by his own logic to say what a bad thing the agreement must be. So what exactly did he want to happen? Presumably, raise everybody's taxes next month, with an especially steep rise for $250,000+ households. Has he previously advocated this policy? Maybe he has, and I missed it; if so, I apologize. But if he agrees it makes sense for now to keep taxes where they are, which has been the Republicans' defensible position, what is so bad about what just happened? Krauthammer is left opposing it because Obama was in favour. It is not every day that Krauthammer is backed into an absurd and dishonest position by his own logic.
What about the long-term deficit? This deal, if temporary, has little effect on that either way, and could easily be deficit-reducing if it avoids a second dip (as Krauthammer seems to concede it might). Obviously, the long-term deficit remains a huge concern. Tackling that requires prolonged Bowles-Simpson-type efforts that were not on the agenda for this deal. They should have been, but they weren't. Was that a reason for rejecting the deal and letting taxes rise next month? I think not. Again, if that is the outcome Krauthammer wanted, then all right. But if that is not his position, then he is the fraud.
Read David Brooks instead.