In assessing today’s debt reduction speech by Pres. Obama, Paul Krugman concludes:
Overall, way better than the rumors and trial balloons. I can live with this.
But how likely are we to actually see legislation resembling Obama’s plan? As I asked Krugman on his blog: practically speaking, isn’t Obama’s plan simply a starting point for negotiations with the GOP?
If Obama’s plan represents the Dem’s position, and Ryan’s plan represents the GOP’s position, wouldn’t one expect that after negotiations, we will end up somewhere in between the Obama and Ryan plans?
Would that be something Krugman could live with?
In my view, the biggest problem with the Obama plan is that it is not a good starting point for negotiations. It is too moderate. When merged with the radical Ryan plan in negotiations, the outcome will be significantly to the right of Obama’s proposal.
I see that Krugman has just updated his blog post with the following:
Update: I should probably say, I could live with this as an end result. If this becomes the left pole, and the center is halfway between this and Ryan, then no — better to pursue the zero option of just doing nothing and letting the Bush tax cuts as a whole expire.