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Krugman blesses Obama budget


The budget will, among other things, come as a huge relief to Democrats who were starting to feel a bit of postpartisan depression. The stimulus bill that Congress passed may have been too weak and too focused on tax cuts. The administration’s refusal to get tough on the banks may be deeply disappointing. But fears that Mr. Obama would sacrifice progressive priorities in his budget plans, and satisfy himself with fiddling around the edges of the tax system, have now been banished.

For this budget allocates $634 billion over the next decade for health reform [but see here]. That’s not enough to pay for universal coverage [so much for that], but it’s an impressive start [on keeping the insurance companies in business]. And Mr. Obama plans to pay for health reform, not just with higher taxes on the affluent, but by putting a halt to the creeping privatization of Medicare, eliminating overpayments to insurance companies.

On another front, it’s also heartening to see that the budget projects $645 billion in revenues from the sale of emission allowances. After years of denial and delay by its predecessor, the Obama administration is signaling that it’s ready to take on climate change.

And these new priorities are laid out in a document whose clarity and plausibility seem almost incredible to those of us who grew accustomed to reading Bush-era budgets, which insulted our intelligence on every page. This is budgeting we [who?] can believe in.

[T]his budget looks very, very good.

Well, much as I respect The Shrill One, this column seems to fall into the "Bush got an F, so Obama gets an A" mindset. For example, the budget seen as a document no doubt doesn't insult Krugman's intelligence, and that's a good thing (though it occurs to me that Krugman, as a professor, over-values having a good paper handed in). But the budget seen as a political process is necessarily dependent both on the stimulus bill and the black hole of the financial crisis -- and Krugman admits Obama's performance is weak in both areas.

And no budget that uses tricky accounting maneuvers to claim the banks are getting $250 billion when they could really get $750 billion is "very, very good."

And no budget that reneges on a promise of "universal" (not even single payer!) health care is "very good." (See here for what happens even to those who work hard and play by the rules.)

So I'll say "good." Krugman gives an A+; I give a B. We'll need to look at the detail!

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gqmartinez's picture
Submitted by gqmartinez on

The devil is in the details. If I hadn't been told one thing by Obama and gotten something completely different than I'd be more optimistic about the health care funds. Specifically, I do worry that the money does not go toward *moving to* a single-payer system but rather to ensuring the status quo.

NOTE: I'd be content with a public option that includes mandates and tightly regulated health insurers: forced to cover all applicants, cost controls, etc. I think that will inevitably lead to full on single-payer in short time. This means I require less than most folks at Corrente.

Salmo's picture
Submitted by Salmo on

Obama won't use receivership to address the zombie banks. Maybe there is more than cowardice at work here, but if so it's not obvious. That's a pretty expensive moment of comfort he is giving the banks and his team, when he chooses to throw a couple of hundred billion dollars at the likes of Citi instead of dealing with the insolvency that is so obvious. From that, it is reasonable to suppose that the discomfort of single payer is a bridge too far for our leaders. I agree that the inclusion of a public option as you describe is the most that we could hope for.