The worst sort of trash...

BY ROBERT RUBIN Congress's failure to reach a fiscal "grand bargain" last summer manifested the deep economic-policy divide separating Democrats and Republicans. Fortunately, the so-called fiscal cliff will soon create an extraordinary second opportunity for a breakthrough compromise.

Oh thank heavens for that. I've always disliked the millennialism of the elite centrist class. This is their wet dream equivalent of the Marxist's "heightening the contradictions," that a worsening situation--the brink, the abyss, the fiscal cliff--will cause a fracture in the fabric of regular politics, an eruption of the stupendous energy that has been locked in gridlock. Yes, I mean the achievement of a bipartisan political settlement that will finally put politics behind us, or at least will put it behind us on the one thing they insist they care about. And this time, I promise, this time the Republicans will not turn around next time they have office and say that the largest single threat to the nation is a surplus, and that this must all be given away in upward tax cuts. This time Lucy will hold the fucking football and Charlie will kick it into fiscal heaven.

Washington's continued failure to get our fiscal house in order poses five basic risks. One, government borrowing risks crowding out private investment. Two, our unsustainable fiscal outlook undermines business confidence by creating uncertainty about future policy, economic conditions and our ability to govern, which in turn dampens investment and hiring.

Never you mind about the huge downside risks to actually living people who are already suffering and under severe economic stress. We have the risk of crowding out, of which there have been exactly zero indicators that it has arrived. Certainly if one continues to press on the accelerator, there comes a time when one goes faster than they can handle. Presumably, one starts to slow down when there are reliable indicators that they are indeed going too fast, and not just when one recognizes that one is speeding up. Crowding out is a real phenomenon. As such, it has real indicators of whether it is happening. It isn't. When investors are putting their money in government debt because of the prices it commands (currently costs them money to lend to the US government, and yet they continue to do so), and not because of the security it entails, that is the time to start worrying about crowding out.

Rubin, however, comes to a not terribly unreasonable position of a "10-to-12 year track of deficit reduction that stabilizes the ratio of debt to GDP and then begins to bring it down." That's not obviously problematic, although it was interesting to see the words "Health Care spending" mentioned not once, nor tagged with the clause (which should always follow) "... will devour private and public entities alike." By beef is with the tone, the "fortunately," and the total divorce of pearl-clutching concerns from reality.