Krugman today captures the fear that's been gnawing at me all weekend about Obama.  I get that he's in a rough spot and I get that losing the House had serious consequences for our side of the debate.  I get that the President might have to give up $38 billion in spending that he didn't want to give up.

But does he have to act like he's enjoying it?

Obama decided to frame last week's compromise as a victory.  He's proud to say that he and Boehner teamed up to cut the budget.  He's bragging about the size of the cuts.  In short, he's given up the argument and is saying "cuts are good!"  So now we're just arguing about what to cut. If last week's debacle was a triumph, then what's next?

Maybe Obama should have done something more counter-intuitive -- he could have said that, "The best I could get out of these idiot Republicans was a budget that has $38 billion in extra spending cuts that will hit the economy at the worst possible time.  At least I talked them off the $100 billion ledge because that would have knocked us right back into a recession.  I don't like these concessions or this budget, but I'm signing this because they're holding the country hostage.  But it's this far and no farther."

What about the debt ceiling debate?  Unless Obama concedes yet again, there is no debt deiling debate.  If these nuts force the U.S. to default on its debt for the first time in history, which will shatter the U.S.'s credit rating and destroy the world debt markets, then the financial sector will rise up and destroy them.  Remember that the reason Wall Street profits bounced back so quickly is that they're using low cost money from the Fed to buy "risk free" Treasury bonds and they're pocketing the difference.  If the Republicans refuse to raise the debt ceiling and cause the U.S. to default, that game will be over and Jamie Dimon will take John Boehner out behind his gold plated woodshed.

So far as the debt ceiling goes, Obama should demand a condition-free authorization and let that be that.  If they pull the trigger on that, it's their heads in front of the gun.  Obama's people should be having backroom meetings on Wall Street about this topic right now:  "Hi guys, you know how most of your tier one capital is in Treasuries?  The Republicans want to make them worthless.  So you better go talk to them."

This is not going to work if the president decides to treat the opposition party as if they're his pals.  I understand the impulse to try to claim every moment as a win, but it makes no sense.  Everybody did not win last week.  People who think cutting the budget during an unemployment crisis won.  People who think doing that is stupid lost.  The president should be calling the cuts stupid.  Unless, of course, he thinks the 2011 budget he agreed to is good policy.  He doesn't, does he?