28.7.11

THE VOICE OF REASON.  Nation TV and Democrat shill Lawrence O'Donnell has a civilized interview with longtime Setting National Priorities co-author Alice Rivlin.  Her message: fiscal policy during a recession or its aftermath ought to be different from fiscal policy during an expansion, and the current level of public borrowing by the national government is a "longer-run deficit problem" that requires slower growth in pensioners' entitlements in the future.

What intrigues about the interview is that Ms Rivlin does not explicitly condemn the Republican caucus for bringing those longer-run problems to the public's attention, and Mr O'Donnell doesn't engage in his usual blustering.   Perhaps he'll rethink his assertion that the Tea Party Caucus's tough stance on the debt ceiling and the (absence of a) budget is politics, rather than governing.  The budget ceiling is a recognition, admittedly honored more in the breach than in the observance, that G - TΔM + ΔB isn't just for the economics journals, and that financial markets can discount the value of a public debt even if that debt is issued under a valid ceiling approved by the two houses and autographed by the President.

No comments: