Big Government, Debt Ceilings, and Barbecues
12:00 AM, Jul 2, 2011 • By IRWIN M. STELZER
The received wisdom in Washington is that a mixture of tax increases and spending cuts – something in the range of $3 of cuts for every $1 in tax increases – will be part of a deal to increase the debt ceiling sufficiently to enable the government to get through the summer congressional recess, when haggling over a longer-term solution will resume.
Meanwhile, the recovery crawls along, although with no help from the banks, which have increased the portion of mortgage applications that are rejected, and continue to make it difficult for small businesses to obtain credit. A bit of good news comes from the auto industry, which is reporting that June sales were up 12 percent over last year, and 4 percent over last month’s dreary performance. Overall, the conference board’s indices that are supposed to foretell economic activity “still point to expanding economic activity in the coming months,” reports the board’s economist, Ataman Ozyildirim.
The president is hoping that the expansion will pick up enough speed to get the unemployment rate closer to where it was when he took office. If it doesn’t, he is hoping that the $1 billion campaign he is planning, and an unelectable Republican standard bearer, will prevent some successor from coming in and tearing up his wife’s vegetable garden. We’ll know more when next week’s jobs report is released.
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