Greg Sargent sums up the decidedly non-theoretical disaster:
Democrats have effectively given up on trying to make the case for further government spending. The result has been bipartisan agreement to marginalize that argument to the point where it’s entirely vanished from the conversation. It’s only in this context that the bizarre bipartisan celebration of a deficit deal that managed to avert total implosion of the economy — while doing nothing to help solve the current problem with additional stimulus measures — makes any sense.
That both parties are asking us to view the current deal as an achievement ... only reveals the degree to which lawmakers, especially Democrats, have given up on making the case for sustained government action to help the economy.
That we must now operate a battered and limping 21st-century economy in accordance with 19th-century economic theory only intensifies the likely political consequences: a still-brutally battered, still-limping economy in 2012, for which virtually every incumbent will risk having to pay the price.
For the first time since January 2009 I'd wager that President Obama has at best 50-50 odds of reelection, and perhaps even an uphill battle. Mitt Romney -- probably -- will demagogue the living bejesus out of a wretched economy that his party, especially, has locked in.
The Senate? Democrats hold a 2:1 disadvantage in seats open or up for reelection, many of which sit in the economy's sorest spots.
The House? Democrats' best shot is at out-demagoguing (on Medicare) Republicans, who unquestionably will nationalize the election over the body politic's supreme economic concerns, which likely will have deepened by 2012's end because of government's spending retractions.
But, who knows. This is only a speculative snapshot, and to each his or her own. All guesswork is valid -- or unvalid, as the case may be -- at this point. It's what political junkies do.