Am scrambling to leave for the airport to spend a few days back East for a reunion of my wife’s family, but I just came across this item in the Wall Street Journal, and–at the risk of forgetting to pack my socks or underwear–couldn’t resist posting it. By economist Carl Pirrong, the item states in a few hundred words the selfsame thoughts that I struggled, meanderingly and blunderingly, to express when we recorded the podcast this ayem. To wit:
Obama operates under the ratchet theory of government. Once ratcheted up, spending cannot ratchet down. Spending that was not missed yesterday is imperative tomorrow, once it has been adopted today. Which means that doing any deal based on Ratchet Man’s promises that he will cut future spending is a mug’s game.
Addressing the nation’s long term—and not really that long term, actually—danger of government insolvency cannot be done in the context of annual budgeting. The crux of the problem is entitlements, and attacking that problem requires fundamental restructuring of the programs, where this restructuring will likely require features (e.g., supermajority requirements) that make it difficult for future Congresses and administrations to renege on the commitments inherent in the legislation mandating the restructuring.
That will not happen while Obama is in office. Period. Which is exactly why 2012 is the only thing that matters, and that doing a deal today or forcing a triggering of the debt ceiling that will have extremely unpredictable economic and political consequences is foolhardy.
Defeat Obama. Everything–including negotiations on the debt ceiling–must be subordinated to that single and historic imperative.