My head hurts

Over at Ace, Monty sums up beautifully what's confusing about an extraordinary piece of babble from the CNBC website:

See, here's the problem:  A spending limit isn't a limit unless it actually functions as a bar to further spending.

The CNBC piece struggles hard to reconcile a lot of contradictory ideas.  For example, Obama promised the sequester wouldn't happen, but the article's author notes with some surprise that it turns out absolutely nothing has been done so far to avert it.  That's because of "entrenched politics in Washington."   (We know who those entrenchers are.)   "Many" thought that the recent Republican agreement to delay the effective date of the debt ceiling signaled a willingness by Republicans to "co-operate" with the White House, but now it seems that Republicans think spending cuts are a good idea.   (Who knew?)

Republicans would rather see the spending cuts take a different form, but if the sequester is the only form on offer, they'll live with it.  Democrats would rather avoid the spending cuts altogether, but they kind of like them, because they spare Medicare and Social Security, so they're not motivated to negotiate, unless the Republicans offer to raise taxes on the wealthy.   (Wait.  Didn't Republicans just agree to do that?)  Republicans don't want to raise taxes on the wealthy again, a negotiation position that apparently has taken the Democrats completely by surprise.

So both sides are more or less content to let the sequester take effect, given the alternatives.  But the spending cuts may slow growth, especially since Congress just increased payroll taxes.   (The article can't figure out to which party to attribute that change, so it stays fuzzy.)  And now that Democrats think about it, they don't like the non-defense spending cuts in the sequester.

I've lost the thread of what Democratic negotiators in Congress are trying to achieve.  I know they want to avoid slowing the economy.  They see spending cuts as slowing the economy; they may even see tax hikes as slowing the economy.  They sometimes express an interest in reducing the deficit, which surely requires either cutting spending, raising taxes, or expanding the economy.  Is the idea that you can expand the economy by raising taxes as long as you tax only the rich?  In other words, the higher taxes on the rich will shrink the deficit as long as they don't slow the economy too much?   I understand the notion that it's fair to tax the rich more, without agreeing with it, but I don't understand the notion that it will not slow the economy.  It sure isn't working in Europe, or California.  We can concentrate on not slowing the economy by avoiding either tax hikes or spending cuts, but then we're ballooning the deficit.  Eventually, that will lead either to runaway inflation or to a drying up of the national credit.

No matter how many times we play this shell game, how is there ever any real alternative to living within our means?

I hope that the debt-ceiling deal will lead to a budget from Congress by the agreed deadline.  It's got to be less irrational to try to negotiate spending cuts within the context of a specific budget than to negotiate with people who say, "If I can't spend as much as I'd like on absolutely everything, I'm not going to pay any bills at all."