The Centrists Attempt to Regroup
By Arnold Kling
I got an email the other day tipping me off to today’s launch of the Fix the Debt campaign, a bipartisan effort.
These folks are the shattered remains of what used to be the center in American politics. I don’t question the sincerity of their intentions, but I think that reality has passed them by.
1. I do not think that there will be an honest debate, or even a reasoned debate, any time soon about the fiscal outlook. The left thinks that the right is nuts, and vice-versa.
2. I think that the “fiscal cliff” noise will drown out everything else after the election. My definition of “fiscal cliff” is running out of suckers willing to lend to our government at low interest rates. (We are closer to this cliff than you may think–look at how much of the debt the Fed has to buy.) But in Washington-speak, the “fiscal cliff” refers to the thought that the budget deficit might be reduced suddenly next year. Horrors!
3. I think that the bipartisan solution to the deficit has passed its sell-by date. Bowles-Simpson was blown off, most egregiously by the President. At this point, there are two scenarios for the deficit. One scenario is for a Tea-Party-ish election result, leading to real budget-cutting (I find this so implausible that I can barely type the words); the other scenario is Greece.*
*Compared to Greece, our government has more options for breaking its promises. For example, since we still own a printing press, we could go with inflationary finance.
Have a nice day.