Stories you shouldn’t miss:
1. President Obama has abandoned his pledge for a debt-ceiling deal that would include both spending cuts and revenue increases, and capitulated to ultra-conservative GOP legislators who threatened to force the federal government into default if he continued to try to close corporate tax loopholes, the Washington Post reports. The president had repeatedly promised that he would not agree to a deal unless it included some revenue increases, but then gave up the fight — as he has done throughout his presidency — when faced with Republicans who were willing to do whatever was necessary to protect corporations and the wealthy from having to pay more taxes.
2. Nobel Prize economist Paul Krugman is calling the Obama surrender a “disaster” for the economy, noting that massive cuts to federal government spending is the worst possible move during an economic downturn. Cuts in federal spending likely will further depress the economy, and thus result in even less tax revenues, thereby worsening the nation’s budget deficit. “Make no mistake about it, what we’re witnessing here is a catastrophe on multiple levels,” Krugman notes in today’s New York Times.