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JASKN

Obama -- Americans Need More Compromise

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I feel like I shouldn't be surprised, but I avoid most mainstream news because it's so depressing, so his language is a kind of shock. Does he speak this explicitly normally?? It's straight out of a Rand novel. (A literal transcription:)

History is scattered with the stories of those who held fast to rigid ideologies and refused to listen to those who disagreed. But those are not the Americans we remember. We remember the Americans who put country above self and set personal greivances aside for the greater good. We remember the Americans who held this country together during its most difficult hours, who put aside pride and Party, to form a more perfect Union. That's who we remember. That's who we need to be right now.

He is such a whiny... second-hander. Is there a better term than Rand's for Obama? He can't have his way as much as he wants in Washington, so he's whining publicly to the news. "Why can't I steal more money!? Boo hoo! People want to do things for themselves. Why don't they want me to control them more?? Wahhhhh...."

Peter Schiff comments, There Are No Monuments for Compromise

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I'm not sure what Obama is thinking. Folks like Krugman and others want Obama to double down on fiscal spending, raising it even faster than planned rather than slowing it down. Given his ideology, I wonder why he would not try to do as they say. Instead, why was he trying to compromise with the GOP? The current budget-deal, which slows the rate of fiscal spending, cannot spur the economy in the short run. Chances are that we will see stagnation. With the 2012 election season less than a year away, Obama must have been tempted to come out with a new stimulus program. I wonder if he thinks this will earn him brownie points with the "independent voter"? I can't see how it will. If the economy has hardly budged a year from now, eh won't even be able to say that the GOP forced a plan that he vehemently opposed.

Not that I'm complaining. I think the U.S. needs a far more serious austerity program, couple with anti-statist structural changes.

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I'm not sure what Obama is thinking. Folks like Krugman and others want Obama to double down on fiscal spending, raising it even faster than planned rather than slowing it down. Given his ideology, I wonder why he would not try to do as they say. Instead, why was he trying to compromise with the GOP? The current budget-deal, which slows the rate of fiscal spending, cannot spur the economy in the short run. Chances are that we will see stagnation. With the 2012 election season less than a year away, Obama must have been tempted to come out with a new stimulus program. I wonder if he thinks this will earn him brownie points with the "independent voter"? I can't see how it will. If the economy has hardly budged a year from now, eh won't even be able to say that the GOP forced a plan that he vehemently opposed.

Not that I'm complaining. I think the U.S. needs a far more serious austerity program, couple with anti-statist structural changes.

Have you been reading about the "Super Congress" committee that has been created as part of this compromise?

As you read more about it I think you'll see why this was deemed politically advantageous.

The IMF has been in talks to replace the US dollar as the global reserve currency. When you look at the details of this "compromise" along with the powers given this "Super Congress" committee and the provisions as to what will happen in the event of this committee not reaching an agreement.... well... the true meaning of Rand's quote "there can be no compromise betwen food and poison" is made abundantly clear.

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As far as I know, a committee of 6 Democrats and 6 Republicans have a mandate to make a second round of "spending cuts" of about $ 2 trillion over (I think) 10 years. If they stalemate, automatics cuts kick in instead. Is this the committee you're referring to?

A lot of countries would like their currency to be part of the reserve currency. The IMF has long used a concept called "Special Drawing Rights (SDR)" which is like a basket of currencies. In the final analysis, what really matters is the holders of financial assets (more accurately, the lenders), rather than a world-body. The Saudis and the Chinese and so on hold U.S. financial assets. China has little choice in this regard, unless they drop their export-oriented policies, which would mean a severe correction in their economy. With the future of the Euro in doubt, there really is no other game in town when it comes to fiat currencies. The only substitute is to hold real assets. The budget deal makes it more likely that people like the Chinese will continue to hold US debt (because then deal demonstrates that the U.S. has some degree of short-term ceiling on fiscal spending). After the deal was announced, U.S. Treasuries have shot up in value.

If it was likely that the U.S. would hit hyper-inflation in the next few years, the buyers of U.S. debt would act differently. However, they're typically holding debt that is due in about 4 years, and the betting is that the U.S. will not see significant inflation over that period. The betting is that inflation will not come suddenly (i.e, not as a sudden loss-of-confidence, as in hyper-inflation), but that it will be a monetary phenomena which will rise in steps year over year, whenever it arrives. That will mean that debt-holders will be able to roll over their debt in an orderly way, at higher rates. That's when the U.S. will really feel the pinch!

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I would like Obama to think about William Lloyd Garrison or Frederick Douglass. They're viewed as heroes today. Patrick Henry, another uncompromising hero. Heck, all our Founding Fathers were fairly radical. Hell, even the Roosevelts were uncompromising in their ideology (even if it was wrong), and both are considered heroes today. The compromisers are hardly ever remembered, or revered. Henry Clay, the Great Compromiser, is now seen as a disgraced man, someone who helped to continue the existence of an evil institution in the name of peace and compromise.

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Shouldn't Obama compromise his doctrine that we (the rigid ideology types) should have to compromise, lest he be accused of holding a rigid ideology? Or how about we each just try to find out what is right and what is wrong and act on that basis? Or would that make too much sense?

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I fear that the normalcy bias will be the undoing of America.

Stated another way, laziness. Lazy thinking, then ignorance, then unsurprising cultural results.

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With the 2012 election season less than a year away, Obama must have been tempted to come out with a new stimulus program. I wonder if he thinks this will earn him brownie points with the "independent voter"? I can't see how it will. If the economy has hardly budged a year from now, eh won't even be able to say that the GOP forced a plan that he vehemently opposed.

I always forget that politicians ultimately care only about re-election, and the rest (what they can get away with) follows. The American public should be embarrassed about their political choices/cluelessness. Edited by JASKN

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The American public should be embarrassed about their political choices/cluelessness.
On the bright side (?), in relative cluelessness the American public does fairly well... ! :) Not that they're smarter or more clued in; they use osmosis as much as anyone else; but, more good stuff seeps in with their osmosis when compared to many other places.

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To be less cynical, I think the way things turned out are the best we could expect, given what we have. The traditional Keynesian way to tackle what we face today would be to throw more fiscal stimulus at it, the way Krugman and so on are suggesting. If the tea-party movement had not sprouted up, with its vociferous and emotional support for deficit-cuts, more traditional GOP members might have taken a different tack. The president might have been asking for more stimulus, and they might have been trying to temper him down. The current deal does not cut -- it slows down the increase in spending. Still, the alternative might have been a debate about how much to accelerate government spending.

This deal might mean relative stagnation ("a new normal", in PIMCO's words) and even a second downturn. If so, that is better than seeing another artificial boost through accelerating fiscal spending.

Instead of fighting boldly for Keynesianism, Obama has granted the premise that deficits are a problem. If the tea-party manages to keep that notion (deficit-reduction) as primary for the next few years, it would have done the country a favor, despite any short-term pain it might cause.

Two bad programs recently have been the slight cut in payroll taxes and the extension in duration for "unemployment-insurance". If this deal causes those two to be stopped, it will be a good thing (in the context of what is politically feasible).

I'd love to see minimum-wages addressed. Of politically-possible actions, I'd like to see a bill introduced in Congress that says that the Federal minimum-wages is repealed until the unemployment-rate comes below 6%. State will then be free to play with their minimum-wage laws.

Of all the negatives looming in the future, I think the biggest threat is ObamaCare, but it's going to take an election to deal with that.

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The sheer volume of new regulations (like Obamacare) piled on top of older regulations (like the minimum wage) is probably the most immediate factor strangling any hope of a real recovery. Tax rates haven't changed significantly and the spending is mostly invisible for the moment... government is too inefficient for the spending to have much effect (it has been reported that each new job "created" by the stimulus spending has cost multiple hundreds of thousands of dollars) though presently it will be causing more and more inflation.

But what I have seen small business owners complain about is the regulations and the cost of expanding, to the point where I've even heard of some refusing to have employees despite working 14 hour days.

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In the middle of today's market meltdown, Obama decided to give a little speech..... you know, just to add confidence and alleviate some of the panic that seemed to be setting in. Of course after he got up and spouted his normal set of worthless platitiudes, the market proceeded to dive another 300 or so points to end down by 635 today.

If there's a silver lining to all of this, it may be that these recent market drops are likely disturbing enough to the general public that they'll ensure Obama's defeat in 2012.

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