Sen. Harry Reid has decided there's no more jams to kick out tonight for the Senate. The 1:00 am vote has been postponed until 1:00 pm Sunday to give everyone more time to make bad decisions.

Negotiators told National Journal that progress was made on the toughest remaining issue -- a so-called trigger to ensure that spending cuts of up to $2.4 trillion would, in fact, be instituted by a special committee the debt-ceiling bills in Congress would establish.

Here are the details on the 12 member Joint Commission proposal (Section 301 of H.R.2693.) The Commission must finish its report with spending cut recommendations by Nov. 23. They will be voted on by Dec. 23. No amendments will be allowed. Also, no motions to postpone or move on to other business, no motions for points of order.

Translation: Reid to Republicans:[More...]

President Obama joined the negotiations this afternoon. Now we can get ready for the deal we all knew was coming. Prediction: The gang of 12 that presides over the second round of cuts which will include cuts to Medicare and Social Security, and probably raising the Medicare eligibility age, will be filibuster-proof and for all intents and purposes, veto-proof given the Republican-dominated House.

In other words, the Democrats are about to sell us out, as we've known for the last two weeks they would.

I could care less about the debt ceiling. I care about the cuts coming less than a year from now that no one will be able to stop. Obama is opening the candy store and letting Republicans eat all they want.

The Boehner Bill has passed the House. 22 Republicans voted no. No Democrats voted for it.

Now it's on to the Senate where deal-making has begun.

The stock market is falling quick. I wonder if Republicans and particularly the Tea Partiers in Congress have checked their brokerage accounts today to see what their radical obstruction moves have cost them personally.

Even with my limited grasp of economics, I'm surprised more people aren't focusing on the danger of the second round of cuts, which seem to be a given. They will be made by a congressional commission, and not only don't we don't know the specific details of what they will include, they may be filibuster-proof and for all practical purposes, veto-proof.

By all accounts that I've read, the second round of cuts will include Medicare and Social Security. The writing is on the wall that in addition to losing Medicare for two years when the age is raised to 67 (since Obama doesn't object to that), there will be cuts to social security benefits. And now we can add losses in retirement savings caused by the stock market tanking. [More...]

While the debt ceiling debacle continues, the fact that the economy is tanking comes into clearer view. Today's reports:

Gross domestic product rose at a 1.3 percent annual rate following a 0.4 percent gain in the prior quarter that was less than previously estimated, Commerce Department figures showed today in Washington. The median forecast of economists surveyed by Bloomberg News called for a 1.8 percent increase. Household purchases, about 70 percent of the economy, climbed 0.1 percent.

Via Dean Baker, a hill of beans:

Look at the chart - AAA S&P rated Australia's 10 year bonds are yielding 4.9%. A- S&P rated Malaysia's 10 year bonds are yielding 3.9%. AA- rated Japan's 10 year bonds, and currently holding a negative watch from S&P, are paying 1.1%. AA- China's 10 year bonds, currently S&P rated stable, are yielding 4.1%.

While as a general matter, the countries S&P has chosen to rate AAA face lower interest rates than countries with lower ratings, there is so much randomness that it is difficult to attribute any cause to S&P ratings. I think no one seems to pay attention to S&P on sovereign debt ratings. More . . .

President Obama will address the nation on the debt ceiling and budget cut issues tonight at 9:00 pm ET. If you're not by a TV, you can watch live here.

For Bachelorette fans, nothing to worry about. Show honcho Mike Fleiss tweets:

Good news! Tonite's show will be shown in it's entirety. You won't miss a single minute.

Good thing, because who wants to miss the Fantasy Dates in Fiji with JP, Ben and Constantine, even though we know from spoilers who goes home?

Back to Obama: Here's a pre-speech thread, all related topics welcome.

One thing our politicians don't seem to take into account is that the average voter (and I include myself in this group) has no idea about the financial big picture because we don't understand it. We only understand when it gets personal....when they threaten to cut something we expected to get (like social security or Medicare), when our health insurance premiums become obscene or when the Government makes us pay for something we had no voice in and opposed (like a few wars, here and there.) The result may be that we take our frustrations out on incumbents in 2012. All of them. Too bad for them, but they all deserve it.

We may not understand the spin and fancy words that the Government and journalists use, but when the numbers are listed by themselves, all in one place, the picture is becoming clear: Our Government is robbing us blind.

In 2001, our debt was $5.3 trillion. It's now $14.3 trillion. What did we do with the $9 trillion we borrowed in the last ten years and who lent it to us? [More...]

I don't care whether the debt ceiling lift is temporary or permanent. I care that I have paid into a system my entire adult life knowing I would get Medicare at 65 and social security at 66. Republicans want to steal the money I've already paid in and put it somewhere else, making me wait another two years for Medicare. And raise my taxes at the same time.

If President Obama backs raising the age of medicare, which won't save the Government money in the long run due to the huge numbers of 65 and 66 year olds who will shift to Medicaid and who will break the backs of small businesses providing health care to elderly workers -- and which will force middle class elderly workers who don't have employer paid health care to pay premiums of ten thousand dollars a year or more for two more years, with huge deductibles and out of pocket costs, he doesn't deserve a second term as Democratic President. Let him run as as Republican or go home to Chicago. He will have sold us out.

President Obama on the failure of the budget talks:

Obama said he had demanded $1.2 trillion in additional revenues over 10 years, in exchange for spending cuts, including cuts to Medicare and Social Security. He said the revenues had been structured in a way that marginal tax rates would not be increased, and no Republicans would be forced to cast a vote that would violate the Taxpayer Protection Pledge, which most Republicans in Congress have signed. Boehner said that the additional $400 billion in revenue would have amounted to a tax increase that would hurt small businesses.

Even though Boehner ended today's talks, he says he will attend tomorrow's White House meeting on the debt ceiling. From ABC: How Negotiations Broke Down.

Krugman:

Everyone in the forecasting business is scrambling to mark down both their estimates of second-quarter growth and their forecasts for later in the year. Goldman Sachs (no link) was pretty optimistic a few months ago; now they’ve grown quite pessimistic[. . . .] At this point, GS is predicting an unemployment rate of 8 3/4 percent at the end of 2012 — five years after the Great Recession began.

The New Normal:

So, terrible growth prospects; low inflation; oh, and low interest rates, with no sign of the bond vigilantes. Ordinary macroeconomic analysis tells you very clearly what we should be doing: fiscal expansion and monetary expansion by any means we can manage[. . .] And what are we talking about in policy terms? Spending cuts and an end to monetary expansion.

I am supporting President Obama for reelection because the alternative is worse. But there is an argument to be made that it is a terrible precedent for a President to win reelection with terrible economic policies that treat 9% unemployment as the New Normal.

Speaking for me only

Matt Yglesias again trots out his tired trope that "the Left" does not understand the importance of monetary policy:

Part of what I think goes wrong in the contemporary left’s understanding of this is that people have a kind of romance with the idea of the Works Progress Administration. [. . . H]owever, [. . .] lurking behind this fiscal measure is a monetary one. Under the fiscal system that prevailed between the wars, the government’s ability to spend money on public works was limited by its ability to get its hand on gold. This is why leaving the gold standard is so crucial, both here and abroad, to launching recovery from the Depression[.]

"The Left" fully understands this. But it understands something more - that printing money is not enough in a liquidity trap. In 1938, Keynes explained it to FDR: