I don’t like the Tea Party’s social conservatism, but its libertarian impulses are proving to be extraordinarily good for America’s long-term economic health—and Barack Obama’s prospects for reelection.
Barack Obama ought to be crowing right now (and he most certainly is behind the scenes). Thanks to his playing good cop to the Tea Party’s bad cop, he’s gotten his 3 trillion-dollar grand deal in debt reduction. Watch him run on that fact—and without any raising of taxes!—even as he positions himself as the only man standing between the Republicans and draconian cuts to Medicare and Social Security.
Here’s the Christian Science Monitor this morning describing an almost perfect outcome for Barack Obama:
The deal, as outlined by Mr. Obama Sunday night, provides an initial $900 billion hike in the debt limit while also enacting spending cuts at least that robust – a key principle for Republicans. Democrats, who lost the argument, said that revenue increases must be part of deficit cutting to ensure that the burden of raising the debt limit doesn’t just fall on the neediest Americans who rely on government programs.
A second round of spending cuts would be taken up by a new joint legislative committee, which would identify ways to cut the deficit by another $1.2 trillion to $1.5 trillion over the next 10 years. A related $1.2 trillion debt-ceiling hike would be automatic, unless two-thirds of either the House or Senate disapproves. . . .
Under the plan, the panel must report to Congress on its proposed cuts by Nov. 12. Congress then has a month to vote the proposal up or down on a fast track that, as for recommendations of base-closing commissions, bars amendments and filibusters.
All the unpleasantness, in other words, will be shifted over to a joint legislative committee, and there ain’t no way that committee will be overridden by a two-thirds majority of either the House or Senate. What they say, thirty days after they say it, will go.
Of course, President Obama’s grand bargain will be spun, both on the left and the right, in terms that are in turns cynical, sober, and even apocalyptic. But President Obama is smiling big right now (as should be the most sane Tea Partiers). Hard choices about the government’s size and scope have begun to be made. These hard choices were coming over the next ten years anyway, and it’s great that they’re getting started already. When historians look back fifty years from now, and ask how America got its financial house in order after the insane Bush years, the answer will rest with the Tea Party and a liberal President who was willing to bow to the inevitable, then run for reelection on it.
So it’s time to sell your gold and get into stocks. No taxes are being raised and the political agenda for the next decade has been set in a libertarian direction. Barring a new war, the size and scope of government will be reigned in, and its debt as a percentage of GDP will start trending down. This should make business and Wall Street happy. President Obama is Ronald Reagan at the cusp of a Thatcherite-style recovery.
The economy will be roaring next year, and just in time for President Obama’s reelection.