resident Obama has surprised nearly everyone with his new plan to freeze spending on domestic programs — excluding defense and homeland security — for the next three years. The cuts, part of a larger deficit-taming plan, will save approximately $250 billion — but many economists (including Nobel laureate Paul Krugman, who calls the plan "appalling") believe the freeze will hurt the prospects for economic recovery. Will Obama's effort at fiscal restraint win back the independent voters who've been abandoning Obama over deficit concerns, or will it just worsen the unemployment problem? (Watch a CNN report about Obama's proposed spending freeze)
Freezing spending now is madness: Welcome to "another game of Dingbat Kabuki," says economist Brad DeLong at his blog. With the economy still sputtering, we need more spending now, not less, and shaving off $25 billion a year in "a $3 trillion budget and a $15 trillion economy" is a "perfect example of fundamental unseriousness" — all you get is "higher unemployment rates in 2011 and 2012."
"Barack Herbert Hoover Obama?"
Good idea, bad execution: "I’m not opposed to a discretionary spending freeze in the slightest," says Alex Knapp in Oustide the Beltway, but if you leave out the Defense Department and Homeland Security, you're not freezing very much. Still, as an underwhelming first step, it's "better than nothing, I suppose."
"Obama to propose discretionary spending freeze"
Democrats have no credibility on fiscal discipline: “Given Washington Democrats’ unprecedented spending binge," says Michael Steel, a spokesman for House Minority Leader John Boehner (R, Ohio), as quoted in The New York Times, this is likely just for show. It's "like announcing you’re going on a diet after winning a pie-eating contest.”
"Obama to seek freeze on some spending to trim deficits"
If it's a game, it's a smart one: You'll read a lot about how "this is obviously a terrible, awful idea that proves the firebaggers right and Barack Obama hates the left," says Jeff Fecke in Alas, a Blog. But if it's used to provide political cover to pass a much-need jobs bill, Democrats get "all the benefits of posing as deficit hawks without any of the actual deep spending cuts" — potentially, a "brilliant" move.
Health care reform is the only way to tame the deficit: Instead of "cheap political tricks that are likely to backfire," says Mark Thoma in Economist's View, Obama should highlight his already-formed idea to reduce the deficit: health care reform. "Everything else is dwarfed" by rising health costs. "If we solve the health care cost problem, the rest is easy. If we don't solve it the rest won't matter."
"Obama wants to limit government spending despite high unemployment..."
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