The last quarter saw a 22% reduction in defense spending, which is the largest quarterly drop since 1972, during the wind-down of the Vietnam War. That, combined with mayhem caused by Superstorm Sandy, caused the economy to contract at a 0.1 annual rate. Basically, the Bush wars have been serving as a form of economic stimulus... Anyone who is complaining about a disappointing fourth quarter should ask themselves if they want to live in a country where economic growth is dependent on a permanent state of war.The upcoming sequester is only going to exacerbate this quandary, and the Keynesian-literate left is really going to have to put on their grown-up pants (that means you) and actually make the case that Defense has always functioned as stealthed economic planning and stimulus in the US that loudmouth libertopian small-gu'ment Republicans pretend isn't happening so they can have their cake and eat it too. Essentially, Defense spending is the disavowed public face of the founding bad faith of Republican Big Government championed as "small government," just as Forced Pregnancy Zealotry is the conspicuous private face of the founding bad faith of Republican Big Government championed as "small government." Of course, what the GOP has always meant by "smaller government" has never been anything other than "less democracy," but that is another topic.
As we wind down the horror show of Afghanistan and resist the neocon trumpets whomping up a replacement war in Iran the left will need to expose the disavowed stimulus of the military-industrial complex and make a very different case. Congress will never pass as much stimulus as the situation calls for in the face of conservative opposition representing moneyed interests worried about higher taxes (because too many of them are selfish to a sociopathic degree) and inflation (because too many of them are risk-averse to a paranoid degree). These conservative forces are mostly in the GOP but there are plenty of Dems on the take, too. All of that actually goes without saying, and the point is that there are other things to say that may be more important here and now. The fact remains that the palpable co-existence of a crisis of massive unemployment, the fact of bargain basement interest rates, and the crying need for hardened infrastructure and renewable energy investment in the belly of the beast of anthropogenic climate change does offer up as obvious a case for countercyclical stimulus, especially at the zero bound, as one could wish for.
Given the climate-change denialism and macroeconomic illiteracy and white racist figuration of the "unworthy poor" that suffuses especially the GOP, and especially in the House, it is highly likely that the votes simply aren't there for anything like the stimulus we need this time around, and it is exactly as useless wishing those numbers away as is wishing away climate change. One can only keep repeating as often and as loudly as possible what the real problems and real solutions are, and then do one's best to help out-organize the Republicans in the hope that the mid-term elections will change the numbers for the better. This is going to be a heavy lift given the gerrymandering for the House and the Senate math this mid-term.
Demoralizing prophesies of inevitable doom and continued dysfunction are good bets but I don't happen to think it is better to be right in one's cynicism than it is to be useful in one's efforts. And definitely false equivalencies blaming "all sides" of fiddling while Rome burns aren't helpful either -- which is not to deny the measure of obvious truth in such diagnoses either. My advice to Atrios, who hasn't really been the same since Bush left office though I continue to read him faithfully, is that if he really is going to remain in the slough of despond through another Obama term he really needs to be telling funnier jokes. Jokes are useful.