Right now, the obvious strategy for emerging from the economic soup is short-term stimulus combined with a Grand Bargain on spending and taxes for long-term fiscal retrenchment. But this would improve the economy in the next year and so hurt Republican chances to regain the White House and Senate. Hence its evaporation. It is far more important for the GOP that Obama lose his job than that more Americans should save theirs' - even if it means voting against proposals they have endorsed in the past. For a decade, the Grand Bargain concept was taken seriously by both sides. Then after Obama's election, the GOP decided to go for broke on keeping revenues deeply depressed, while offering politically impossible proposals to end Medicare as an entitlement or abolish social security. And short term, it worked.
I'm not sure how this works out for Obama - on the one hand he gets to portray the Republicans as the economic terrorists they are, but on the other, he helms an economy teetering on the edge of another recession. Should the latter happen, his chances of re election would be in very serious danger.
The priority should of course be the American people, but this is reality show politics and policy is of little consequence. Yet again the GOP is holding the nation hostage to its quest for power and unyielding desire to destroy Obama, and yet again it has gotten its way regardless of real world consequences.
The Democrats need to play this one intelligently and pray the economy doesn't collapse again. Too big wishes, but right now, that's all we've got.
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