Photo: The White House
We were stunned this morning to see that Paul Krugman had gone over 12 hours on his blog without commenting on yesterday’s tax deal. We figured he must have been so upset by Obama’s decision to cave on tax cuts for the rich that he couldn’t even type because his fingers were shaking.And so imagine our surprise when we read his take on The Deal only to see he doesn’t find it that horrendously appalling. he doesn’t like it, but… he says it’s better than what it could have been.
What’s interesting though is his take on how it affects Obama politically. The stimulative aspects — extended unemployment insurance and the payroll tax holiday — only last for one year. Thus any bump that the economy gets will be fading through 2012, as Obama is trying to run for re-election.
Thus a GOP President is now more likely, and therefore a full, permanent extension of the Bush tax cuts — which will come up early in the next Presidential term — is more likely. Well played, GOP.
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