The president's proposal being unveiled Wednesday includes an additional $1.8 trillion in deficit reduction over the next decade, bringing total deficit savings to $4.3 trillion, based on the administration's calculations.

It projects that the deficit for the 2014 budget year, which begins Oct. 1, would fall to $744 billion. That would be the lowest gap between spending and revenue since 2008.

But instead of moving Congress nearer a grand bargain, Obama's proposals so far have managed to anger both Republicans, who are upset by higher taxes, and Democrats upset with cuts to Social Security benefits.

The president's spending and tax plan is two months late. The administration blames the delay on the lengthy "fiscal cliff" negotiations at the end of December and then fights over the March 1 automatic spending cuts.

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A few months later, it’s worth revisiting that supposedly triumphant moment for Obama, because it’s starting to look a lot different. The problem: The $1.2 trillion sequester, which Obama once assured Americans would never take effect, is now being implemented, threatening to drain life from an economy that’s finally showing signs of a real recovery.

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First off, “stabilizing the debt” means to stop the debt ratio—debt/GDP—from rising (where “debt” means debt held by the public—that’s what matters for all that follows).  For our debt to grow more slowly than our GDP, our deficits don’t have to be zero, but they do have to be below 3% of GDP.*  Why is that a good thing?

Well, in fact, it’s not always a good thing.  In times of crisis—recessions, depressions, war—the ratio goes up for good reasons.   Our borrowing temporarily outpaces our growth in order to offset some disaster.

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Yet that same day, the Congressional Budget Office projected that the federal budget deficit will drop to 5.3 percent of the nation’s total output by the end of this year.

This is roughly half what the deficit was relative to the size of the economy in 2009. It’s about the same share of the economy as it was when Bill Clinton became president in 1992. The deficit wasn’t a problem then, and it’s not an immediate problem now.

Yes, the deficit becomes larger later in the decade. But that’s mainly due to the last-ditch fiscal cliff deal in December.

By extending the Bush tax cuts for all but the top 2 percent of Americans and repealing the alternative minimum tax, that deal increased budget deficits by about $3 trillion above what the budget office projected last August.

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Ben Franklin, however, was wary on the subject. “Rather go to bed supperless than rise in debt” was his warning, and even now his cautionary words carry great moral weight.  We worry about debt, yet we can’t live without it.

Debt remains, as it long has been, the Dr. Jekyll and Mr. Hyde of capitalism.  For a small minority, it’s a blessing; for others a curse.  For some the moral burden of carrying debt is a heavy one, and no one lets them forget it.  For privileged others, debt bears no moral baggage at all, presents itself as an opportunity to prosper, and if things go wrong can be dumped without a qualm.

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Stewart defended present-day cinema punching bag “Zero Dark Thirty” as having not been made in cooperation with the government and said the torture it depicts is “difficult,” raising the ire of liberals across the blogosphere. (Andrew Sullivan wrote that “this subject is too important for equivocation or the ‘I'm just a comedian’ cop-out.”)

Then came Stewart's smug dismissal of the “trillion-dollar coin” idea floated in order to stop the debate debacle in Congress. While the idea was not tenable for many reasons (including optics), Stewart’s open mockery and suggestion of alternatives got him in hot water with Paul Krugman, the Nobel-winning economist and New York Times columnist.

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We’re just two weeks into 2013, but it’s already clear that the “effectiveness, stability, and predictability” of our institutions is in question. First, we came uncomfortably close to implementing a round of ruinous austerity that no one—even the deficit hawks—wanted, and now, we’re again fighting the GOP over raising the debt ceiling, and fulfilling our financial obligations to the world.

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At an unexpected news conference on Monday he said he won’t trade cuts in government spending in exchange for raising the borrowing limit.

“If the goal is to make sure that we are being responsible about our debt and our deficit -- if that’s the conversation we’re having, I’m happy to have that conversation,” Obama said. “What I will not do is to have that negotiation with a gun at the head of the American people.”

Well and good. But what, exactly, is the president’s strategy when the debt ceiling has to be raised, if the GOP hasn’t relented?

He’s ruled out an end-run around the GOP.

The White House said over the weekend that the president won’t rely on the 14th Amendment, which arguably gives him authority to raise the debt ceiling on his own.

And his Treasury Department has nixed the idea of issuing a $1 trillion platinum coin that could be deposited with the Fed, instantly creating more money to pay the nation’s bills.

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From the Palm Beach Post:

The South Florida Tea Party — the group that helped Marco Rubio launch his Senate bid and that hosted Donald Trump during his last flirtation with a presidential run — is shedding the words “tea party” as it undergoes a name change.

“We felt for branding reasons that we wanted to differentiate ourselves from certain organizations that have the name ‘tea party’ and we can’t control,” said Everett Wilkinson, leader of the organization that will now be called the National Liberty Federation.

Other local Tea Party groups, like the Palm Beach County Tea Party, are keeping their name but attempting to overhaul their image. “They won. We lost. They have a message that appeals to the masses. We don’t. That must change,” the group's leader, Michael Riordan, said at a recent meeting.

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“We remain strongly opposed” to chained CPI, AFL-CIO government affairs director Bill Samuel told Salon. “It’s a very substantial benefit cut.”

“Chained CPI” is a proposed alternative method of calculating cost of living adjustments, which would reduce future increases in Social Security benefits. Samuel said that for many seniors on fixed incomes, even “the current system may not be adequate.” He called the claim that chained CPI could be implemented in a way that would be fair to such retirees “sort of ludicrous.”

Obama has repeatedly touted chained CPI as an aspect of a potential “Grand Bargain” with Republicans to reduce the deficit. In a “Meet the Press” interview aired on Dec. 30, the president highlighted it both as an example of his willingness to make concessions to the GOP and part of his “pursuit of strengthening Social Security for the long-term.”

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Big Money, as Krugman writes in his book, buys Big Influence. And that’s why the financiers of Wall Street never truly experience regime change — their cash brings both political parties to heel. So it is that the policies that got us where we are today — in this big ditch of chronic financial depression — have done little for most, but have been very good to a few at the top.

But they’re not satisfied with having only most of it — they want it all. If Krugman were writing his book today, he could find plenty of evidence in the deal that supposedly kept us from going over the fiscal cliff. Behind closed doors, Congress larded it with corporate tax breaks worth tens of billions of dollars — everything from tax credits for NASCAR racing and the railroads to subsidies for Hollywood, rebates for the rum industry and loopholes for offshore financing that could help giant multinationals like General Electric avoid billions of dollars in corporate income taxes.

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But the President can use certain tools that come with his office – responsibilities enshrined in the Constitution and in his capacity as the nation’s chief law-enforcer — to achieve some of his objectives.

On the debt ceiling, for example, he might pay the nation’s creditors regardless of any vote on the debt ceiling – based on the the Fourteenth Amendment’s explicit directive (in Section 4) that “the validity of the public debt of the United States … shall not be questioned.”

Or, rather than issue more debt, the President might use a loophole in a law (31 USC, Section 5112) allowing the Treasury to issue commemorative coins – minting a $1 trillion coin and then depositing it with the Fed.

Both gambits would almost certainly end up in the Supreme Court, but not before they’ve been used to pay the nation’s bills. (It’s doubtful any federal court, including the Supremes, would enjoin a President from protecting the full faith and credit of the United States).

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In a piece for the New York Times today, Adam Davidson of Planet Money asks: Should we tax the things that annoy us? Like, say, traffic jams?

Driving home during the holidays, I found myself trapped in the permanent traffic jam on I-95 near Bridgeport, Conn. In the back seat, my son was screaming. All around, drivers had the menaced, lifeless expressions that people get when they see cars lined up to the horizon. It was enough to make me wish for congestion pricing — a tax paid by drivers to enter crowded areas at peak times. After all, it costs drivers about $16 to enter central London during working hours. A few years ago, it nearly caught on in New York. And on that drive home, I would have happily paid whatever it cost to persuade some other drivers that it wasn’t worth it for them to be on the road.

Instead, we all suffered. Each car added an uncharged burden to every other person. In fact, everyone on the road was doing all sorts of harm to society without paying the cost.... Add up all the cars in all the traffic jams across the country, and it’s clear that drivers are costing hundreds of billions of dollars a year that we don’t pay for.

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There’s much less clarity in the current situation. President Obama won re-election by a solid margin, taking 51 percent of the popular vote and 65 million votes overall. Democrats expanded their majority in the Senate, and managed to make a little headway in the House. For as much as it disappointed liberals, the fiscal-cliff deal was a sign of the new times: It’s hard to imagine any House Republicans voting for a tax increase on the wealthy in 2011.

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With another debt-ceiling show-down looming, talk of the 'platinum coin option' – declared deeply unserious in 2011 – is once again gaining some traction. Here'sJosh Barro over at Bloomberg:

I'm glad to see Representative Jerrold Nadler lending his support to the idea that PresidentBarack Obama should avert a debt-limit crisis by issuing large-denomination platinum coins, as permitted by 31 USC § 5112.

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There was genius behind the way both were created. First, in a country with a particular fear of slackers and moochers, the proverbial "free-riders," they were tied to your work history, with "payroll taxes" that at least partly helped fund your eventual benefits. They've come to be called "entitlements," a term the programs' would-be "reformers" use to make recipients sound like greedy entitled geezers, because you're entitled to them: You paid for them (or for part of them). Second, they went to a group we can all empathize with: senior citizens, whether because we have elderly parents or grandparents, or because we'll eventually be old ourselves (we hope). Finally, they were universal programs that avoided "means testing," because first Franklin Delano Roosevelt and then Johnson knew that programs that only went to the poor tended to be unpopular, poorly funded and politically vulnerable.

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“Forecasters significantly underestimated the increase in unemployment and the decline in domestic demand associated with fiscal consolidation,” Blanchard and co-author Daniel Leigh, a fund economist, wrote in a paper on growth forecast errors. The authors essentially admit that they failed to consider important factors about how regions might react to austerity in times of financial crisis when they advised IMF austerity policy.

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If anyone outside the Beltway was paying attention (a big "if"), they probably thought the title referred to an old episode of “Cheers” in which the goofy mailman does his taxes. After all, replaying reruns would have been more compelling content than this latest installment of "Real World: U.S. Capitol."

Reality TV, of course, is this moment's perfect metaphor. That schlocky format's foundational oxymoron -- it is "real" but not real -- also defines contemporary politics.

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