The Republican hostage taking of the American economy in an effort to keep the rich richer has won out. Tea Party members must be thrilled, in the past year their ‘compromise’ has amounted to tax cuts and spending cuts galore.

And many economists will conclude that reducing government spending during times of economy downturn is the WORSE thing you could possibly do. But of course, don’t tell that to thick skulled Republicans.

…the G.O.P. has just demonstrated its willingness to risk financial collapse unless it gets everything its most extreme members want. Why expect it to be more reasonable in the next round?

…..how can American democracy work if whichever party is most prepared to be ruthless, to threaten the nation’s economic security, gets to dictate policy? And the answer is, maybe it can’t. – Krugman in NY Times

• President Obama surrenders; Krugman on why debt deal will cripple economy.




• Obama HAD 5 options, instead he killed his party.
• BBC: US Debt Deal simple guide
• BBC: About debt ceiling deal
• Debt Ceiling Deal: Little Fiscal Drag in ’12, Big Risk in ’13 – Macroadvisers
• Congress run by monkeys.
• A Renewed Focus on the Fed’s Role – NYTimes.com
• Income Share by Top Fractile – Econbrowser
• Everyone agrees, Republicans won at the expense of all Americans (except the very rich)
• Help Wanted Ads Bode Ill for Jobs – NYTimes.com
• Global PMIs and Fed Policy: they’re linked – Angry Bear
• Is the economy hitting stall speed? – macroblog
• Does Headline Inflation Converge to Core? – FRBSF
• The Economic Drag – Calculated Risk
• If I Were In The House – Paul Krugman
• Meanwhile, in the Global Economy – Paul Krugman
• Mobility in the U.S. is Down – Freakonomics
• Peter Demeulenaere on analytical sociology – Dan Little
• The Fumbled Handoff of Obama’s Recovery Plans – Rortybomb
• The Journal and the Recovery – Uneasy Money
• Ransom Paid – Robert Reich