2016 Postmortem
In reply to the discussion: Republicans Are Blowing Up Negotiations Because Boehner Is Weak & Republicans Are Crazy [View all]Jim Lane
(11,175 posts)My point is that any deal to reduce the deficit could be improved by adding more stimulative spending, to get it to the point where it would increase rather than reduce the deficit. That would be better for the country.
I'm not holding Obama entirely at fault here. The result of Republican intransigence is that there's essentially no hope of getting a good stimulus package.
Obama is to blame, however, for falling into line with the deficit hysteria. He should be taking it on directly. For example, instead of saying that government needs to tighten its belt in tough times, which is exactly wrong, he should be going on TV to explain why the economy needs the federal government to run a deficit right now. Wider popular understanding of the point would somewhat weaken the Republicans' leverage, and also set them up to suffer in 2014 for their intransigence.
As for the CPI, my offhand guess is that paying higher Social Security benefits is, overall, less stimulative than some things, such as extending unemployment insurance benefits, but more stimulative than others, such as tax cuts for the rich. Generally, there's more stimulative effect when people are more likely to spend the money they get. Social Security goes to people at all levels of income, so the stimulative effect would be an average. Why do you say that keeping the current CPI is not stimulative? I'd consider it stimulative as compared with the proposed switch to chained CPI.