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The best news about the budget deal which was announced Tuesday, writes Neil Irwin, is âthe fact that it exists at allâ. That alone âsignals an improvement in the functioning of budget policymakingâ, Fitch Ratings says.
The less good news is the actual substance of the deal. Government spending will be $45 billion higher than if the deal hadnât been reached, but Irwin points out that discretionary spending will still decline next year. Taken together, says Irwin, âfiscal policy [will] still be a drag. It just will be less of a drag than it would be otherwiseâ.
Yuval Levin looks at the actual changes to spending, and says, âwhat stands out most as a general matter about this proposed agreement is how very small it isâfor good and badâ. Under the agreement, discretionary spending will return to pre-deal levels in 2016.
The full-on bad news is whatâs not in the deal: thereâs no extension of the Emergency Unemployment Compensation program, which provides support to Americans who have exhausted state unemployment benefits. Matt Yglesias thinks âthe long-term unemployed are screwedâ. At a time when long-term unemployment is twice what is was in 2008, Josh Bivens calls the exclusion of any additional assistance âboth cruel and stupidâ. Matthew OâBrien points out that the CBO estimates that extending benefits would have added 200,000 jobs next year (i.e. one Novemberâs worth). He thinks Congress is simply more concerned about cutting the non-problematic deficit than helping the unemployed.
AEIâs Michael Strain writes that millions of workers are âsuffering financially, emotionally, spiritually… Society is also suffering: A large pool of willing and able workers are idle; our already segmented society is even more segmented; our country is less dynamic, vibrant, and thrivingâ. For Strain, extending current benefits isnât the right response. Instead, he advocates for a mix of new programs, including things like relocation assistance, subsidizing wages through already existing programs, and better transportation infrastructure.
Brad DeLong points to a chart from Calculated Risk that details public and private job gains under various presidential administrations. DeLong thinks that unless there is a radical change in fiscal policy, âwe are now going to start speaking of âlost decadesâ in the pluralâ. — Ben Walsh
JPMorgan expected to face criminal action for turning a blind eye to the Madoff scheme – DealBook