Will We Have Economic Recovery in 2013

Where is the economy heading in 2013? This question was a much discussed topic during the presidential race, but it was always framed in electoral politics. Now that we finally have the election behind us we can consider the question on its own terms. There are long-term challenges for the economy, but of more pertinent concern is what does the coming year have in store. Here are the problems that I see going into 2013 in no particular order:

(1) Housing is Not in Recovery — Foreclosures, short-sales, and unemployment problems look to continue limiting the number of homebuyers and housing will continue to struggle (though some local levels will see recovery, nationally this remains a problem).

(2) Unemployment Still Will be High — Millions of workers remain unemployed for more than 6+ months and will not re-enter the labor force easily or quickly, labor force participation won’t increase overnight, productivity has increased since the recession even though total employment has fallen, and structural changes such as shifts in the sectors of large scale employment will be a problem for a while.

(3) Regulatory and Tax Uncertainty for Business Investment —There are a host of Dodd-Frank regulations waiting to be implemented, and another four years of Obama means increased environment and labor regulations slowing down business.

(4) Private Debt Deleveraging — Probably the biggest challenge is that mortgage debt has only slowly declined relative to housing prices, and while housing prices are at 2003 levels, mortgage debt is 67 percent higher today than in 2003. This means there is a lot more deleveraging to go through. As I wrote for RealClearMarkets this morning:

If you are a Keynesian, then consumers shedding their existing debt means a reduction in aggregate spending, stalling the key engine of growth…. The story isn't much better if you prefer a more supply-side economic approach to jumpstarting growth, and want to reduce taxes and regulations on businesses so they can thrive. If businesses, particularly small businesses whose expenses are part of their household budgets, are more interested in deleveraging than expanding, then tax cuts and regulatory burdens will have only a small effect on economic growth in the short run. This does not mean these policies should be ignored, but rather that their true value will be to set the stage for a stronger long-term recovery as lower taxes and regulatory costs will allow these businesses to clear their balance sheets faster. The deleveraging cycle still needs to process.

(5) Fiscal Cliff? — It is not clear yet how Congress will address the fiscal cliff, but if we go over entirely it will have a negative impact on the economy. Whether that is a problem depends on how bad the above four problems make the economy anyway and whether you believe short-term pain from reduced government spending is worth the long-term need to cut the deficit and national debt.

And none of this gets into the long-term challenges for the economy like the national debt, out of control entitlement spending, QEnfinity as monetary policy, declining education outcomes, and rising health care costs.

Still despite all of this, I’m a cautionary optimist because we are in a better place than 2008, and most of this is more likely to mean a stagnating economy (growing around or under 2 percent) rather than another recession. But you do the math and decide whether this is what recovery looks like or not.

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  • ||

    You know, I wonder what would happen if a radical Jeffersonian/libertarian type somehow bludgeoned his way into a victory in a future Presidential election having run on a platform of intense deregulation. Would people get off their asses if they knew President Hypothetical was about to shut off the welfare faucets?

  • Killazontherun||

    You have to wonder why more politicians don't run on that given it taps into the deepest veins of this nation. You see the obvious political risk, but is the risk in doing so only political? Seems like those who aren't already marginalized like Paul almost instinctively know where that line is they can't cross.

  • Sudden||

    A few comments:

    First, I would put tax and regulatory uncertainty at #1. Even with some deal on the fiscal cliff and some concrete idea about the nature of tax increases (which are a given post-Boehner's speech yesterday), the regulatory framework will discourage business investment over the next few years because so much of the aspects haven't been fully fleshed out in Dodd-Frank and Obamacare's most onerous provisions are set to be implemented in the coming term.

    Second, there may actually be some housing "recovery". Although there are still a decent share of underwater owners, most will eventually qualify for HAMP or haircuts of some kind. The most egregious debt:value ratios have been liquidated at this point. The problem lies in the prospect of any increases in broad economic output. If the economy starts improving, money velocity will pick up (even with Dodd-Frank seeking to strangle it) and the inflation of the monetary base that has only lead to asset bubbles in rich white guy markets like equities, will begin to reverberate throughout the broader economy. This will lead to interest rates spiking, which will put a grinding halt to whatever nascent real estate "recovery" is occurring. That grinding halt will end up lowering overall housing values again, which will result in a lot of buyers being underwater since half of all new home purchase mortgages issued in the last 4 years have been FHA 3% down ones.

  • db||

    Bok totally wins with that Thursday Thigh-slapper.

  • LTC(ret) John||

    A day earlier, and EXTRA FUNNI!

  • Fist of Etiquette||

    The current administration came from Chicago with no idea how the private sector functions, and in four years hasn't educated itself. If there's a recovery it will be in spite of Obama, not because of him.

  • Pro Libertate||

    It is possible that even with the current levels of government parasitism on our economy that we could stage a recovery. Our economy is still huge and could probably squeeze another boom or two before the shit hits the fan.

    But in the long term, probably in the medium term, the blood loss will be too great, and the host will sicken, possibly to the point where a recovery is no longer possible.

    And that may have already happened.

  • ||

    Our economy is still huge and could probably squeeze another boom or two before the shit hits the fan.

    Huh?

    Dude we are barely standing on our feet. We get hit with any sort of downturn and the fight is over.

    The shit is going to hit the fan sooner rather then later.

    There have been long periods of no-recession...but they are rare.

  • Pro Libertate||

    No, no, I agree. I'm just saying that it's not impossible. Let's say some sort of technological breakthrough or something else of economic significance occurred. That might give us a reprieve. . .for a time.

    Also, with this prolonged non-recovery, the definition of boom may get diluted for political purposes. But that's a different matter.

  • ||

    Where's Rearden Metal when you need it?

  • Pro Libertate||

    Somebody better supply it, or there will be. . .consequences.

    That, fusion, and colonies in space, where Republicans can be shipped en masse.

  • JEP||

    I don't think it's going to happen. You'd need an innovation on the same level as the internet to have a boom like that. Having a boom like that twice in 30 years isn't going to happen.

  • Pro Libertate||

    FUSION!

  • LTC(ret) John||

    Needz moar broken windows!

  • Pro Libertate||

    We got nukes. We could break windows on a scale outside of human conception.

  • Sudden||

    The problem is that if any recovery occurs, we've already sowed the seeds of it's own destruction.

    While the deleveraging that necessarily occurred in 2008-2010 was so pronounced that it forced the Fed into the first round of QE (and I'll be honest, that first round had a decent argument behind it), the problem was that the Dodd-Frank bill that passed shortly thereafter completely halted any recovery in credit markets and discouraged most lending that wasn't going to be sold of the feds, so the Fed went through additional rounds of QE to offset this impediment to velocity of money hampering the monet it created from making into the broader economy. On top of that, the Administration's profligacy of the purse forced the Fed to triple down in money creation in order to buy up govt bonds lest the bond market force interest rates up and thereby counter the feds QE actions.

  • Sudden||

    So we've had an enormous expansion of the monetary base that hasn't been felt anywhere outside of equities markets. Increases in economic output and some of clarity in the Dodd-Frank regulations still to be conceived by regulators will cause that velocity to begin moving again, and when it does, inflation will begin to spike in a way not since since the late 1970's. This will force interest rates up, completely decimate whatever recovery was occurring, and balloon the federal deficit to something ungodly as interest rates returning to historic norms will cause debt service to go from $250b/year to $900b/year, all while tax revenues will take a huge hit again.

    My prediction: the deficit in Obama's final year in office will be over $2 trillion.

  • Pro Libertate||

    Ha! I can refute you with one word: Stimulus!

  • Sudden||

    The one biggest advantage to a Romney presidency would be that I think he would largely dismantle the most asinine aspects of Dodd Frank over the course of his administration and instruct the fed to begin pulling back on the money supply in equal enough measures to get velocity up while shrinking the monetary base in an effort to prevent significant inflation as lending increased.

  • Pro Libertate||

    Well, that's over. I suppose one thing to hope for is that Obama sucks so bad that Congress goes way Republican in 2014, with the newbies being fiscal hawks.

    Not going to happen, but that's all I've got right now.

  • Aresen||

    If the economy continues to drift, the GOP will certainly pick up seats in 2014 and 2016. If the economy goes south in a big way, the GOP will make huge gains.*

    The likelihood of them being fiscal hawks, however, is not great.

    *My personal bet: The economy drifts, with average growth in the 1% range and unemployment hovering around 8% for the foreseeable future.
  • VG Zaytsev||

    Dream on, there's going to be another official recession before the 2014 elections.

  • ||

    That's a horrifyingly ridiculous number, and there's no way in hell I'd bet against you.

  • Sudden||

    Seriously, my biggest doubt there is that I'm lowballing it. A lot will depend on how high that inflation really gets. The number could be closer to $3 trillion just as easily.

  • Gray Ghost||

    Current treasury interest rates are, if I'm reading this right, 1.63%. At that rate, debt service is (carry the one...) according to the CBO, 224 billion. Historic T-bill interest rates are here, and look like they averaged, ballpark, about 6-6.5% during the 90s. So, anywhere from 820b to 890b, assuming we don't add anymore debt (and you know we will....) If O continues to emulate Carter, and we get 10% or (gulp) 15% rates, look forward to spending ~1.4 to 2 trillion per year.

    Just in interest. Hello default.

  • VG Zaytsev||

    This will force interest rates up,

    Don't think so, the FED will keep interest rates low in the face of high inflation for years the end game happens when the dollar stops being the world's reserve currency. A year or two of hyper inflation will follow that.

  • ||

    If there's a recovery it will be in spite of Obama, not because of him.

    The public will never see it that way. The Cult of the Presidency is absolute. If an asteroid hit tomorrow it would be the President's fault. If Uranium PU 36 was discovered tomorrow and solved all energy issues, it would be the President who would get credit.

  • Sudden||

    The Cult of the Presidency is absolute. If an asteroid hit tomorrow it would be the President's fault

    I don't know about that part. I think the "obstructionists in the house" will get a pretty big share of blame for insufficient research grants to spot asteroids before they hit Earth.

  • Pro Libertate||

    See, this is where the GOP should realize that they're going to be blamed by some no matter what. Might as well go full obstructionist.

    It's to save the fucking country, after all. Isn't that why these noble people enter public service?

  • Aresen||

    No.

    They'll blame the libertarians who deregulated asteroids.

  • Pro Libertate||

    Ah, ha!

  • Omni||

    "If an asteroid hit tomorrow it would be the President's fault."

    No, that would be "Bush's fault"

  • Bam!||

    We're getting hit with an asteroid because Bush didn't handle global warming properly!

  • ||

    I'm sure that, officially, we will.

  • ||

    According to people like joe, we're in one right now.

  • Scarcity||

    Prediction: People who were touting the nascent recovery as we approached the election will pretend they never said such a thing or "realize" that things were worse than anyone could've known.

    From there Obama is a winner regardless of reality over the next 4 years.

  • John||

    Already happening. When confronted with the horrible economic news, the liberals I know are starting to say "this was going to happen no matter who won the election".

  • Bill Dalasio||

    Technically, yes we are. That's what's so incredibly rotten about the whole situation. We are on the upside of the business cycle. It's just that growth on that upside has been anemic. What we seem to have seen is a fundamental shift down in the trend rate of growth. The slope of GDP has declined. But, in terms of the movement of the economy around that trend, yes, we are on the upside of the cycle.

  • db||

    Green Shits, dude.

  • ||

    rather than another recession.

    Yeah cuz one can predict a recession.

    Look we have recessions about every 7 years....if we are in for stagnation and we are due for a recession...

    Well we are fucked.

  • Pro Libertate||

    Fuckflation.

  • db||

    Stag

  • Pro Libertate||

    Stagfucktion?

  • db||

    Weird. I tried to make a lame joke about stagfucktio or something, abandoned it, and somehow posted the ruins of my attempt. Surprised the skwerlz didn't grab it.

  • Sudden||

    Baratheonflation?

  • VG Zaytsev||

    Look we have recessions about every 7 years...

    From 1948 to 2008 (the start of the last recession) there were 11 official recessions.

    That works out an average of one every 65 months. So we're 'due' for one next year.

  • Citizen Nothing||

    I think I've discovered how the "progressives" are planning to find more money. I think it's gonna come from my 401k. And note the links at Huffington. Apparently a growing meme.

  • Citizen Nothing||

    I now see the article is from June. So I'm late to the party. Still.

  • Sudden||

    This is actually one of the reasons I'm thinking about giving up on the Roth IRA portion of my retirement strategy. The idea with the Roth is that all money put into it is taxed going in but not taxed after its compounded and is being withdrawn. I doubt that favorable back end tax treatment survives this administration.

  • Scarcity||

    Exactly why I never bothered with Roth conversion or contributions. (Now I'm rich, bitch! and couldn't contribute anyway) As a 20-something at the time, it seemed very unlikely I'd actually avoid paying taxes again on the Roth contributions when I retired decades later.

  • Marshall Gill||

    They will not keep their hands off the Roth IRA's. While it hasn't happened yet, I have always been suspicious of the claim that future governments will see your money as tax free because today's government taxed you now and pinky swore.

  • Certified Public Asskicker||

    We have this debate a lot at work. As a younger CPA, this is basically my argument.

    Since I have about 40+ years to go before maybe eventually one day retiring, who knows what whacky shit congress will think of in that time.

  • Scarcity||

    I'm skeptical enough they won't implement an annual tax on IRA/401(k) balances. Tapping Roth withdrawals would be far less insidious.

  • Sudden||

    How ironic it would be. "We have to tax retirement savings in order to save the old age pensions and healthcare systems!"

  • Enough About Palin||

    "A Perfect Failure: Why the 401(k) Has Been a Flop"

    Mine has been making money hand-over-fist for years. I recall when the market crashed in '08 hearing people tell me that they were losing money on their 401(k)s because stocks dropped so they moved it to other 401(k) investment options. Idiots.

    But to the HuffPost article, Yes, they are going to try to find a way to get part of your 401(k).

  • ||

    Oh, I assure you they are already thinking of how they can steal that money. It's on the horizon, count on it. It's the kind of thing that makes them erect: it's money, just sitting there, tax free, and some people might have a whole lot of it more than others, and the rightful owners can't use it (without penalty) now anyway. They'll claim to be just borrowing it.

  • Pro Libertate||

    Well, that'll make the GOP resurgence easy, because that'll piss off a nice chunk of the population.

  • VG Zaytsev||

    They'll claim to be just borrowing it.

    They'll claim that they are investing it for you at a guaranteed high rate of return (5% or so) right before high inflation kicks off

  • Ken Shultz||

    "It is not clear yet how Congress will address the fiscal cliff, but if we go over entirely it will have a negative impact on the economy."

    I think it should be clear how President Obama will address the fiscal cliff. Obama promised to raise taxes; he campaigned on raising taxes, so raising taxes is what he is almost certain to do.

    With Boehner capitulating early on taxes, and no reason to think the Democrats in the Senate will oppose Obama on taxes, we should see taxes approved as the primary solution to address the fiscal cliff.

    Meanwhile, the world is generously offering to finance our debt for ten years a pop at 1.5% annually, and I would expect to see Congress and Obama take advantage of that.

    So, the tax increases we get will probably be close to what we would get in the fiscal cliff--and the spending cuts will not be as harsh as prescribed in the fiscal cliff.

  • Sudden||

    With Boehner capitulating early on taxes, and no reason to think the Democrats in the Senate will oppose Obama on taxes, we should see taxes approved as the primary solution to address the fiscal cliff.

    I think there are two reasons he is capitulating on it: 1. keep his defense industry cronies fat and happy. 2. Obama wants to tax the ever loving fuck out of the people who could get the economy moving again, they'll let him own this shitshow of an economy in hopes that four years hence, they'll get back the white house. .

  • Ken Shultz||

    I think Boehner wants plenty of money to spread around. That's how he achieved and maintained his power as speaker before, and that's how he plans to keep his power as speaker in the future.

    Boehner has always been a big spender. He was a big spender under the Bush Administration. If there's a bigger spender than Boehner in Congress I don't know who it is.

    Boehner wants Obama in his corner when he goes to negotiate spending with the Senate. Boehner is afraid he won't get the money he needs to spread around--that the money will be spent more on people and things the Democratic leadership care about.

    That's Boehner's primary concern. Making sure he has plenty of money to spread around. Always remember, the Tea Party sprang up outside the Republican Party--in no small part--to protest the acquiescence of John Boehner.

  • ||

    Why isn't Debt-to-GDP ratio not on the list?

  • Ken Shultz||

    Life is a marginal analysis.

    Question: Why did Debt-to-GDP ratio matter to Greece and Italy?

    Answer: Because investors were no longer willing to finance their debt at interest rates Greece and Italy could afford.

    Question: How much interest are investors willing accept to carry U.S. treasuries?

    Answer: Right now, the 10-year note is trading at 1.62%.

  • Sudden||

    Answer: Right now, the 10-year note is trading at 1.62%

    That's in large part due to the fact that the total market of govt bonds in 4 times larger than the govt bonds that are actively being sold to the real market. The Fed is artificially constraining the supply of treasuries by buying 70% of them up before any are ever sold to actual investors with money that already exists.

  • Ken Shultz||

    Oil's down from up over $100 a barrel to $85 a barrel now.

    CRB index is lower. Inflation is not what they're worried about.

    There is a real danger that we'll fall off the inflation cliff eventually. No doubt. There is an end there somewhere, and we won't know exactly where it is until we start falling off of it.

    But there's no way Obama and the Democrats are worried about that. Not when they can get more money for 1.62%

    I'm with you in that we are a horse in line at the glue factory. If we don't get out of line, eventually, they're gonna turn us into glue. But we're not there yet. Right now, according to the interest rate on our treasuries, we're the prettiest horse in the glue factory, and everybody wants to lend us money.

    There's no way Obama and the Democrats are about to make cuts they don't have to when they can get money for cheap like that--and they have a mandate to raise taxes. The only reason Greece and Italy cut spending was because no one would lend to them at rates they could afford anymore. (Except Germany)

    We don't have that problem yet. And since life is a marginal analysis, the Dems won't start really cutting until they no longer have any other option--until the credit markets cut them off.

  • Sudden||

    CRB index is lower. Inflation is not what they're worried about.

    Well, institutional investors may not be worried about inflation, hence their willingness to accept treasuries at under 2% returns. But the fed is to some extent. Part of the reason the Fed is buying up 70% of the treasuries is because there is no way in holy hell the government will be able to sell over a trillion dollars in US debt annually while only paying 1.62% on it. The demand for treasuries at 1.62% wouldn't be enough to sell them, forcing yields on treasuries to rise in order to reach market clearing levels.

    The Fed is scared as all hell what happens if the market sees the man behind the curtain.

  • Ken Shultz||

    It would go higher if they sold a lot more debt, but there's plenty of appetite for it. And the worse things get in Europe and elsewhere, the more appetite there appears to be.

    I mean, so long as the yield stays around or below whatever inflation rate, what do they care?

    And, honestly, even if Obama and the Democrats did push us into inflation, it wouldn't be the first time a Democratic president has presided over that.

    If the voters won't punish Obama for what he's done so far, why assume they'd punish the Democrats for pushing us into inflation. I bet given the choice between pushing us into inflation or jeopardizing government employee/union jobs, the Democrats would argue out loud in favor of inflation on the Sunday morning talk shows--if it came to that.

  • Ken Shultz||

    They're not trying to run the economy in the best possible way.

    They're trying to keep their contributors and constituents slopped.

    And on the Democrat side of the ball, that's the 47%. The 47% don't care about inflation--they care about feeding at the trough.

    Even if inflation kicked in, they'd keep feeding their pigs until the rest of the electorate finally cut 'em off.

    They don't care about what's good for the economy.

  • ||

    Question: How much interest are investors willing accept to carry U.S. treasuries?

    They are not "real" investors. Those notes are being bought by the US government and huge wall street banks who are getting the money to buy those notes from the US government.

    Furthermore The pump is not hooked to any part of the Us economy in any meaningful way.

    To stretch to analogy even further imagine giant ponds sitting on property owned by the mega-banks...sure they are getting filled up but there is no outlet to the rest of the economy which is in a huge drought.

    Anyway back to the problem of Debt-to-GDP ratio. The cause of the stagnation due to the high debt is attributed to a "crowding out" phenomena. or at least that is what the economic papers i have read say. I don't think 10-year note trading prices really matter in this cause and effect scenario.

  • ||

    Because investors were no longer willing to finance their debt at interest rates Greece and Italy could afford.

    Yeah you are talking about financial collapse scenario.

    I am talking about the persistent compounding drag on the economy that having a debt-to-GDP ratio above 90% found in the scientific-economic-literature.

  • Ken Shultz||

    "I am talking about the persistent compounding drag on the economy that having a debt-to-GDP ratio above 90% found in the scientific-economic-literature."

    I'm with you on that!

    But who that's making the decision about what to do with the fiscal cliff cares about that?!

    John Boehner doesn't care.

    The Democrats in the Senate don't care about our debt-to-GDP ratio.

    Barack Obama doesn't give a shit about our debt-to-GDP ratio!

    What is going to stop them from taking on more debt--when it only costs 1.62% annually?

  • Ken Shultz||

    "They are not "real" investors. Those notes are being bought by the US government and huge wall street banks who are getting the money to buy those notes from the US government."

    That's the going rate right now.

    You could be one of those investors if you hurry up and buy one today...in the next four minutes.

    There's no doubt that the Fed's actions are having some effect, but whatever effect it's having is also giving Obama and Congress the option to sell more debt at a low interest rate rather than cut spending.

    I'm not saying that isn't going to catch up with us eventually, but it's probably not gonna stop them from taking on more debt to solve the fiscal cliff.

  • ||

    it's having is also giving Obama and Congress the option to sell more debt at a low interest rate rather than cut spending.

    Go back to the original subject Ken:

    Why isn't Debt-to-GDP ratio on the list?

    The list in the article is a list of things preventing an economic recovery in 2013.

    See how you moved the goal post?

    Not cool.

  • Ken Shultz||

    I thought you were talking about what I was talking about.

    I wasn't moving the goal posts.

    I was just off topic.

  • VG Zaytsev||

    How much interest are investors willing accept to carry U.S. treasuries?

    Answer: Right now, the 10-year note is trading at 1.62%.

    Answer - the FED is willing to accept a 0% interest rate on treasuries.

  • kinnath||

  • Ken Shultz||

    "It is not clear yet how Congress will address the fiscal cliff, but if we go over entirely it will have a negative impact on the economy."

    You say it would have a negative impact on the economy--in the short term--and I might agree with you. As the economy unwound its dependence on government, there would be layoffs, etc. But over the long term, any decrease in spending will have a positive impact.

    Over the long run, that's called creative destruction. We cannot wring wasteful, growth killing, job killing, inefficient government spending out of the economy without there being some damage to somebody in the short term. But over the long term, killing such spending leads to sustainable economic growth.

    If the fiscal cliff will bring that kind of creative destruction, then I say let's go over the cliff. Certainly, if my choices are between higher taxes and less spending and higher taxes and the same or more spending, I'm choosing the former--especially if that will hurry along the process of creative destruction...

    But there's no sense in getting ahead of ourselves. We have no choice. Obama and Congress are going to raise taxes whether we like it or not. And they are going to finance more deficit spending with debt--whether we like it or not. We have no say in the matter. And apparently the Republicans in the House, under Boehner, aren't going to do anything to stop it.

  • Rasilio||

    I'm still not sold that "going over the cliff" will be all that bad.

    Sure it will lower GDP but GDP is a relatively meaningless statistic in the real world.

    First off with the tax increases, most of them are either easily avoidable or really questionable whether they ever resulted in increased effective tax rates to begin with. The amount of money removed from the economy is highly unlikely to be more than a small fraction of what is predicted.

    Then with the spending cuts, sure that spending, and the jobs it finances will go away but where did that money come from? In this case it came from someone buying Government debt. With that debt no longer being sold those people will have no choice but to spend or invest that money in the private sector. Even if you buy the argument that the government spending would be more effective at boosting the economy the fact that the money is still out there being used in the private economy would mostly offset the loss in spending.

    Yes all those tax increases and spending cuts will reduce GDP, but it is highly unlikely that they will do so by anywhere near the total amount of the two combined.

  • Ken Shultz||

    I'm with you on a lot of that. I just think it's important to remember that Boehner isn't about to stand firm and let us go over the cliff.

    He's already sold us out.

    Boehner might have stood firm on taxes. He'll never stand firm on spending. If our ability to withstand whatever Obama wants to do--that's worse than the cliff--depends on Boehner holding the line on spending?

    We're doomed.

  • T o n y||

    Going over the cliff means everyone's taxes going up and defense getting cut... how would that be Boehner standing firm? It's the complete opposite of what he wants.

    Obama holds all the cards on this one.

  • Ken Shultz||

    Boehner MIGHT have held the line if Obama wanted to raise taxes AND cut spending less than was already agreed to.

    Boener's already acquiesced on taxes and he's never seen a spending bill he didn't like anyway.

    Try to keep up.

  • widget||

    Obama's got a 2 of spades, a 4 of diamonds, a 6 of clubs, a jack of hearts, and a joker. Mitt Romney would be holding the same hand. The Chinese play poker too.

  • ||

    Kind of hard to say Obama holds all the cards when Boehner wants the same thing Obama wants.

    ie more spending and more revenues to pay for that spending.

  • Drake||

    The debt limit card is Boehner's only one. I bet he'll get a party revolt in the House when he tries to give it away cheap.

  • ||

    Even then Obama is terrible at negotiation.

    In Woodward's book Obama had a deal with Boehner which included taxes and then at the 11th hour said he wanted more taxes.

    Blew up the whole thing.

    This was after the 2010 election...somehow i doubt after this election win by Obama he is going to become less arrogant and a more honest negotiator.

  • VG Zaytsev||

    In Woodward's book Obama had a deal with Boehner which included taxes and then at the 11th hour said he wanted more taxes.

    Blew up the whole thing.

    This was after the 2010 election...somehow i doubt after this election win by Obama he is going to become less arrogant and a more honest negotiator.

    Obama blew that deal up because he never wanted a deal in the first place, not because he's a bad negotiator (and no I'm not saying that he's a good one either).

  • Ken Shultz||

    "Kind of hard to say Obama holds all the cards when Boehner wants the same thing Obama wants.

    Tony's so thick in his Democrats good Republicans bad messed up worldview--that he can't even conceive of the fact that Boehner and Obama both want the same thing.

    He doesn't even understand what we're talking about. It's like talking to a Moonie.

  • widget||

    And the poker game analogy doesn't square with the human condition. OOPS, I was mistaken to even anti in on this.

  • T o n y||

    All Boehner wants is to smoke cigarettes and play golf. But since he somehow stumbled into the Speakership, he is on the leash of a Republican caucus that doesn't want to see a dime in tax hikes or a dime cut from the Pentagon.

  • Ken Shultz||

    Democrats good.

    Duh...

    Republicans bad.

    LOL

  • T o n y||

    Democrats are good or bad on a case-by-case basis. To get in the Republican door you have to be a moron or a near-psychopath.

  • Ken Shultz||

    I just spent a whole thread eviscerating Boehner, but Tony thinks I'm supporting the Republican somehow.

    Republicans bad.

    Derp.

    Democrats good.

    LOL

  • widget||

    Do you know else smokes cigarettes and plays golf?

  • ||

    All Boehner wants is to smoke cigarettes and play golf. But since he somehow stumbled into the Speakership,

    Boehner attended Cincinnati's Moeller High School and was a linebacker on the school's football team, where he was coached by future Notre Dame coach Gerry Faust.[9] Graduating from Moeller in 1968, when U.S. involvement in the Vietnam War was at its peak, Boehner enlisted in the United States Navy but was honorably discharged after eight weeks because of a bad back.[10] He earned his B.A. in business administration from Xavier University in 1977, becoming the first person in his family to attend college, taking seven years as he held several jobs to pay for his education.[7]

    Shortly after his graduation in 1977, Boehner accepted a position with Nucite Sales, a small sales business in the packaging and plastics industry. He was steadily promoted and eventually became president of the firm, resigning in 1990 when he was elected to Congress.

    Tony I despise Boehner for a whole bunch of reasons and can think of even more why you might despise him.

    No need for you to invent idiotic baseless criticisms of him.

    Simply because you are a full blown eugenicist that wants to mandate birth control does not mean you have to be liar as well.

  • T o n y||

    I'm not in any way suggesting Boehner's desire to smoke and play golf is a moral failing. I consider him a "good" Republican. He'd cut a deal if the crazy people would let him.

  • PapayaSF||

    And soon, the blame.

  • widget||

    If you are a Keynesian, then consumers shedding their existing debt means a reduction in aggregate spending, stalling the key engine of growth…. The story isn't much better if you prefer a more supply-side economic approach to jumpstarting growth,...

    Economics babble drives me nut sometimes. The reason to buy or rent shelter is so that your not standing in the rain, soaking wet, and shivering. "aggregate", "stalling", "jumpstarting" are untethered to seeking shelter.

  • Trespassers W||

    Here's my black-swan prediction for the economy: massive earthquake in California, Krugman rejoices.

  • PapayaSF||

    There are plenty of black swans lining up. Europe continues to go bankrupt. Egypt gets closer to bankruptcy and starvation. Iran get closer to nukes. Israel gets closer to attacking Iran. Islamists continue to gain power. China is a house of cards in a half-dozen ways, and their military is filled with nationalists who would like to take on Japan or even the US. Here at home, various states and localities are on the verge of bankruptcy.

    Honestly, I think any "recovery" will be feeble and temporary, and soon we will be in even worse shape than we are now.

    Then, of course, it will be blamed on Bush or the GOP House or the rich or whatever remains of the free market, and we will try to "fix" things with various Democratic nostrums that will only make the problems worse. Rinse and repeat.

  • Gray Ghost||

    I am surprised it hasn't happened yet, but war with Iran, mining of the Straits and the consequent jump in oil prices to greater than $125-150 barrel is what I thought was going to be the black swan.

  • attractions guide||

    I think economic is better and better with the time passed, and does it not recovery now?

  • Audrey||

    Nobody knows if things will really get better this year. To make it better there should be some changes. We should borrow less, cut expenses and focus and saving money and things which are vitally important for us. But American economy is already on it’s way to recovery and it’s very good that some progress is already visible. I think that we need to change the attitude to money and manage it prudently. Until the economy is debt-based and people live through instant online payday loans and credit cards it will be hard to get any success. Financial problems may happen to everyone but borrowing shouldn’t be a lifestyle.

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