And more importantly, will this give the republicans or the conservatives the edge come next election (if there is one)

umm, will republicans cave and give a reasonable offer to democrats? I mean, I'm a registered Republican and I hate the plans they've laid out

Resonable republicans... Good luck finding one...

Here's what will happen, if anything is to happen. The GOP will accept the part of the Reid plan where the debt ceiling won't need to be raised till after the election, and the Democrats will accept a lot of real cuts in the tradition of the many, many Republican proposals.

As for the next election, everyone who was involved in this is poisoned. It's not impossible for the Republicans to lose the House in 2012 now (though it's still quite likely they'll get a majority in the Senate). Unless Obama can spin away his own irresponsibility throughout his term which gave a big segment of the House Republicans to act so nutty, then it hurts him almost as much as it does Congressional Republicans. Almost. The only people in politics to come out of this looking pretty much the same are the GOP presidential hopefuls, if only because they've kept away from it like plague.

That's all assuming we get a deal, which I think is still up in the air. Both sides have the incentive to wait till the last minute to try and force their opponents to yield or wreck the global economic order. It's crazy that it got this far and it's everyone's fault.

which gave a big segment of the House Republicans the opportunity to act so nutty,

Well I'm hoping that the republican nominee is Michelle bachmann or at least mitt Romney cause then the general public will realize how stupid the tea party is or the Christian hicks will be scared off by the Mormon and Obama wins regardless...

You know Romney's beating Obama in a recent poll, right? And that Bachmann can't win the New Hampshire or South Carolina primaries, even if she pulls off an Iowa win (which is a lot less likely with Perry in the race)?

This election is going to be razor thin. Obama will have a terrible economy and the Republicans nominee (Romeny or Perry, probably) will not have the real support of the party. There's no scenario where Obama just "wins regardless."

Looks like the Democrats are willing to give away the store in return for a debt ceiling deal that extends past the 2012 election.

Good analysis, Invictus.
+1 goldfinger.

@dennis Ron Paul. I dont completely agree with the guy and i consider myself neither liberal or conservative. But he has principle and is the only real antiwar republican

Invictus you sound like a wise man. I think that are biggest issue today is that everything this country does is them or we not us. Everybody is looking to blame somebody so they can get the upper hand and Obama is the worst. Every speech he gives he just dishes out blame around him so he won't take any. And what plan has Obama purposed other then health care since being in office. and i am not even sure health care should count

It's not everyone's fault. People need to stop saying that crap. The Republicans played this game of chicken and they're so nuts that they're forcing a completely one-sided deal down the throats of the most vulnerable in this country else we default. It's absolutely despicable and anybody who is a Republican after this episode needs a good long look in the mirror and needs their head checked.

Republicans are a pestilence on this country and destroying jobs and the economy in order to *get* Obama. Period. Anybody after this who says Obama is a "leftwing socialist" is lying POS.

In a just world the entire House Republican caucus and the Senate Republican leadership would be in jail for treason.

Enough with the false equivalence bullshit. Obama gift wrapped what is essentially Boehner's ridiculous House bill minus the doing-it-all-over-again in 9 months. No taxes on corporations. Nothing on the revenue side whatsoever. Just cuts to the poor, the elderly, students, and everybody who isn't a millionaire or billionaire. They held our country hostage to force their fascist tea party insanity down our throats.

I agree with The Prussian. The end goal of both parties is to screw us.

Obama owns the bad economy. The nearly trillion dollar stimulus based entirely on neo-kenyesian principles failed definitively. GDP growth for I think the first quarter this year was 0.4%, which is awful. Obama's economic policies have failed, and have left us with loads of debt and enormous budget deficits.

*Sigh* jpgredsox that point has been addressed in countless threads. The only reason growth has been low is because the stimulus package was not big enough. Now, let's test your memory, which party wanted to make the stimulus package bigger, and which party cut it down to the largely ineffective package that we actually got?

@ Putin, I completely agree, and on that note
http://krugman.blogs.nytimes.com/2011/07/26/the-cult-that-is-destroying-america/.

Also, I've heard the theory that the reason the Republicans are being so difficult over the debt ceiling is that they're hoping Obama really will invoke the 14th Amendment to overrule congress, and that they'll then use this as grounds to impeach him. I suppose whether that actually will happen remains to be seen.

Well theres a simple way to fix this, it is shooting for 3 to 4 percent inflation so that it's manageable but the real value of our debt goes down.. And this all relies on the ability of America to borrow money at low interest to pay back the debt...

denis, that's a horrible solution, because that means a 3-4% increase in costs for the consumers with little to no guarantee of pay raises. As a right-leaning individual, I hate what the Tea Party has done to Republicans, but at the same time, I have to praise Obama for being willing to compromise when the idiots on the other side wouldn't.....if you can even call compromise what happened

Look goldfinger the solution to paying your debt is never going to be great because guess what... It's debt... It's Money that you should have payed or owe someone, it's Nessecary sometimes but it comes with a price. 3-4% inflation annually is not ludicrous because right now we only have 1-2% and prices are keeping up with wages and such so sure the comsumer might have to make sacrifices but it's the only solution to our debt problem... If you want to solve the debt crises while keeping every other sector of society and without asking someone to make a sacrifice lay out the plan... I'm all ears.

@ Red Sox, how is the austerity plan working out for the UK?

Once again, Invictus' analysis is spot on.

Invictus + 1.

@ denis

"Well theres a simple way to fix this"

You're right. There is a simple way to fix this. Decrease spending and increase revenue.

@ Mafialligator

"Also, I've heard the theory that the reason the Republicans are being so difficult over the debt ceiling is that they're hoping Obama really will invoke the 14th Amendment to overrule congress, and that they'll then use this as grounds to impeach him. I suppose whether that actually will happen remains to be seen."

Even if he does get impeached by the House, there is no way the Senate would convict him.

I agree with Gunfighter in many ways. but have some comments of my own

@ Mafialligator who has a quite the cool name. Do you really think that if we just spent more money that we would be in a better spot right now? not even Obama thinks that at this point they are all coming to the realization that cutting spending is the awnser to this solution and doing it on a large scale

And i am also a republican if you could not tell and i still don't think that the Tea party is right all the time but I think that every time period needs to have that extremist party to pull it back to a middle ground i mean look at the hippies you don't have to agree with them but they were a way of pulling back the war crazy people of this nation at that time and you see countless examples of this throughout time

Nice analysis invictus

"Do you really think that if we just spent more money that we would be in a better spot right now? not even Obama thinks that at this point they are all coming to the realization that cutting spending is the awnser to this solution and doing it on a large scale" - Other countries who spent larger stimulus packages relative to the size of their economies (for instance Canada) are in better shape than the US is now. There are a number of factors that have made the US economy as bad as it is right now, but the cuts Republicans insisted be made to the stimulus package are part of it. And for the record the stimulus package worked about as well as anyone in the know expected it to, given the cuts made to it.

Obviously the debt problem would be larger...but paying off debt is easier in the long term if your economy is not in the toilet, and it's not as though the national debt would not exist without the stimulus package.

The only reason Obama is cutting spending isn't because he thinks that fucking over the poor, the elderly and all the marginalized and vulnerable is a good way to run a country. He's doing it because if the country defaults it will be a disaster and the debt ceiling needs to be raised. In other words, he's not doing it because he thinks its a good idea (an attitude which, if I'm correct in that suspicion, does him credit, because it's not), he's doing it because he has no choice.

And the US is already far to the right of the rest of the developed world. Your argument, sully, that the US was desperately in need of a far right party to pull it to the middle would be laughable if it weren't so alarming.

@sully-

Not if we just spent money. But if we had spent more money properly, we'd be in a better position. The February 2009 stimulus package was somewhere between 750-800 billion, depending upon what you think of the real effect of the AMT cuts. Right around a third of this was tax cuts, which are not especially stimulatory, but were a practical necessity in order to prevent the bill from being filibustered in the Senate. So, realistically, we're talking about 500 or so billion in spending. The initial stimulus package requested was in the neighborhood of 1.2-1.4 trillion, with less of a tax cut as an integral part of the package. Call spending somewhere around 1 trillion. Given the demand crisis that's at the heart of this recession, and an extra 500 billion dumped into the economy would likely make a pretty substantial difference.

All of this ignores, however, the real disaster to grow out of the past 30 odd years of deregulation: the fact that in lieu of building a new energy grid, or repairing en masse American infrastructure, we've actually just spent the time funneling wealth at the richest people in the world, and have reached the point where we're selling off pieces of our infrastructure to make the world's superrich superricher.

The debt ceiling deal did not reduce current spending at all. All the debt ceiling deal did was reduce the "growth" of future spending. This debt limit deal automatically raises the debt limit next year so basically it is a blank check to the Obama administration to spend over $2 Trillion more dollars than will come into the government over the next two years.

Pooh Pooh the misnomer "debt limit." If increasing the debt by over $2 Trillion is any kind of "limit" someone needs to tell Webster's to redefine the term.

For those of you who were not 18 in 1969 you don't remember being an adult at the beginning of the stagflation period that saw interest rates rise from 1969-1981 until they reached a peak of over 20%.

Greece is going through the throes of those astronomic interest rates right now, and nothing, absolutely nothing is in place for that not to happen to the United States.

We are absolutely dependent on spending borrowed money as I type. That means that the bond market can charge the United States absolutely any interest rate is wants and we are helpless because we spend $1 Trillion more than we bring in every single year.

If the bond market ever decides that it can find better investment opportunities than the United State and our interest rates go up then all of you youthful individuals who were not 18 in 1969 are going to see something you've never seen in your lifetime in the United States, a long period of economic "malaise" as Jimmy put it.

TC, just stop. You don't know what you're talking about and you need to stop.