We heard Obama's speech yesterday. Sounded good - but...

Let's start out with the very positive reaction from Rachel Maddow:

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Rachel is buying what Obama has to say. I do suggest that you read the speech as Rachel suggested. Here is the speech.

Really, it sounded great - if you believe Obama. Here's another view of Obama. This video comes from several months ago, but it really fits right here. This is an interview with liberal economist Michael Hudson..



Yeah, I liked Obama's speech. He said the right things and he made the right promises. Unfortunately he didn't go far enough. That's both sides of the budget issue. So now take a look at Paul Krugman's take on the speech:

Style: I liked the way Obama made a case for government at the beginning. I liked the way he accused Republicans of pessimism, of abandoning a hopeful vision of America. Good that he went after the Ryan plan — and good that he went after the cruelty of that plan. If you ask me, too many percentages. Oh, and whichever speechwriter came up with “win the future” should be sent to count yurts in Outer Mongolia.

Substance: Much better than many of us feared. Hardly any Bowles-Simpson — yay!

The actual plan relies on some discretionary spending cuts, this time including defense — good, although I think too much is being cut from domestic spending. It relies on letting the Bush tax cuts for the rich expire — finally! — plus unspecified reductions in tax expenditures.

The main thing, though, is the strengthened role of and target for the Independent Payment Advisory Board. This can sound like hocus-pocus — but it’s not.

As I understand it, it would force the board to come up with ways to put Medicare on what amounts to a budget — growing no faster than GDP + 0.5 — and would force Congress to specifically overrule those proposed savings. That’s what cost-control looks like! You have people who actually know about health care and health costs setting priorities for spending, within a budget; in effect, you have an institutional setup which forces Medicare to find ways to say no.

And when people start screaming about death panels again, remember: you can always buy whatever health care you want; the question is what taxpayers should pay for. And compare this with a voucher system, in which you have insurance company executives, rather than health-care professionals, deciding which care won’t be paid for.

Overall, way better than the rumors and trial balloons. I can live with this. And whatever the pundits may say, it was much, much more serious than the Ryan “plan”.

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.

Update update: I don’t want to step too much on the administration’s selling point, but progressives upset by the claim that there are three dollars of spending cuts for every dollar of tax increases should be aware that there’s a bit of creative labeling going on. As I understand it, they’re counting both interest savings and reductions in “tax expenditures” — subsidies through the tax code — as spending cuts. It’s a much more balanced plan if you look at the balance between revenue increases and non-interest outlays.

Update update update: The Times has a good side-by-side comparison. A world of difference — and Obama made the moral as well as practical case for his version.

So I like the direction of the speech, though I don't think it went nearly far enough to present as the beginning of the negotiations from the liberal side. Krugman has that correct. This is where the negotiations should end up, not where they should start. The conservatives are flat out crazy extremists. The other problem, though, is how much can Obama be expected to live up to his promises?