Sunday, February 14, 2010

President Obama Signs Law Raising Public Debt Limit from $12.4 Trillion to $14.3 Trillion

The bill also establishes a statutory Pay-As-You-Go procedure requiring that new non-emergency legislation affecting tax revenue or mandatory spending not increase the Federal deficit – in other words, that any new spending or tax cuts be paid for with new taxes or spending cuts.

That's it...imposing a fixed quantity of money in an economy that is suffering from a massive lack of aggregate demand and high unemployment. Quasi gold standard. Welcome to "the new normal."


Mike Sandifer said...


It's even worse than that. To quote Scott Sumner from his blog:

"1. Stocks fall and the dollar rises on Bernanke warnings

2. Obama pushes new jobs bill

Policy coordination just doesn’t get any more uncoordinated than that."

This is our government.

Tom Hickey said...

Barack Hoover Obama and Great Depression II in the wings?

Matt Franko said...

Im trying to maintain a sliver of hope.

This looks like it definitely kills any payroll tax holiday for the rest of the calendar year. They do leave open (imo via their "non-emergency" language) the possibilty of a bailout for a state (CA, NY, etc..) perhaps.

But it looks like both sides are ready to take these arrangements into the Nov elections. for better or worse.


PS, Ive been reading alot of your comments out there in the blogosphere and you are doing a great job!

Ryan Harris said...
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Tom Hickey said...

Thanks for the kudos, Matt.

I take it as my patriotic duty.:)