Fool me once, shame on you; fool me twice…

The “supercommittee” admitted defeat; it won’t have a blueprint for reducing the nation’s deficit (stories here, here and here).  Is this a bad thing?

Some have argued, no: the first direct result of getting no plan from this committee is that the law which authorized it will now automatically cut $1.2 trillion from defense and non-defense spending over ten years starting in 2013, and that may end up giving us more deficit reduction than we’d have gotten otherwise.  No way to know for sure, of course, but it makes sense.

I mean, there’s no reason to believe that the same members of Congress who thought nothing of threatening government default for political gain this past summer were likely to come to any agreement now, not when the party that controls the House (and virtually controls the Senate with the threat of filibuster) is still holding its breath threatening to turn blue rather than be responsible and discuss the best ways to increase revenue as part of the answer (along with spending cuts and overall economic growth) to getting the federal budget on a healthy path.  None at all.

To believe otherwise would mean, first of all, believing that the sheep people lined up behind Speakers Boehner and Limbaugh have any goal more important that the defeat of President Obama.  They don’t, unless it is the personal destruction of Obama, and anyone unlike themselves.  Second, it means they would have to have the backbone to say no to the no-tax extremists and the campaign contributors.

I read an interesting article making the point that we’re foolish to think that our elected representatives will do anything that makes sense for us, because they’re in place to serve their bosses: namely, the minority of the population who actually vote in the primaries, and the even smaller percentage of the people who pay the bills through campaign contributions both above and below board.  (By the way, read Michael Moran’s piece setting the stage for his blog The Reckoning.)

The other thing to watch out for right now, though, is the cowardly Congress finding a way to back out of the deal it made with itself!  No Congress can pass a law that would prevent a future Congress from unpassing that law; just because it set itself this deadline and mandated future budget cuts as a penalty for failing to meet that deadline can’t prevent the next Congress from overriding all or some part of the threatened budget reductions, and that’s entirely possible for a group that already can’t say no to anyone (which is a big part of what got our budget in this mess to begin with).

Give some thought to Moran’s suggestion: in times of crisis, what if we take control away from politicians and give it to people who know what they’re doing?

A real super-committee – a real committee not only empowered to take the steps necessary to right the American economy, but competent to do so – would include 12 serious thinkers. They might include policymakers like former Fed Chairmen Paul Volker or (the suitably contrite) Alan Greenspan, economists of left and right like Stanford’s John B. Taylor, Yale’s Robert Schiller, NYU-Stern’s Nouriel Roubini, plus a few representatives of labor, small business and capital – let’s say Robert Reich, Joseph Schneider of Lacrosse Footwear, and Warren Buffett, just for kicks. No investment bank chairman, please, and no one facing reelection.

Can you imagine this group failing to come up with a solution? Can you imagine any of them worrying more about the next election than the future of the world’s largest economy? Certainly, they would clash – perhaps over the same tax v. spending cut issues. The difference: they would understand better than any member of Congress that no solution is far worse than a less-than-perfect solution.

Advertisements

Upon further review, we’ve determined that the deal isn’t really much of a deal

Well, everything turned out just swell after all the drama over the debt ceiling debate, didn’t it?  I mean, so long as you don’t mind that:

–the sorry spectacle of the political fight led one rating agency to drop America’s debt rating a notch below AAA anyway: it doesn’t doubt that the U.S. can pay its debts, but feels the political stalemate raised questions about the government’s willingness to pay its debts, and so lowered the rating as a warning to investors;

–the deal doesn’t actually reduce the nation’s debt, it just lowers the rate at which it is rising; and

–taking the nation’s financial health hostage in a political negotiation was shown to be an effective tactic, so we can expect to see it used again in the future.

Among the lessons learned:

–the deal assumes the elimination of the so-called Bush tax cuts at the end of 2012, meaning Republicans gave up the very thing they fought so hard for a year ago.

Plucking flaccid compromise from obstinacy should not be mistaken for victory, just as the smell emanating from Washington after this deal shouldn’t be mistaken for success.

82% of Americans are unhappy (disgusted?) with the performance of Congress on the debt issue, nearly half are unhappy with the president’s handling of the situation, and 40% view the Tea Party unfavorably.

More than four out of five people surveyed said that the recent debt-ceiling debate was more about gaining political advantage than about doing what is best for the country. Nearly three-quarters said that the debate had harmed the image of the United States in the world.

–the political system in Washington, D.C. is becoming more and more unproductive, and may not be able to help us with anything.

The president has tried reasonableness and he has failed. It has been astonishing to watch Obama’s sheer unwillingness to give up on his opponents after their refusal to work with him on the stimulus package, health care reform, or the extension of the Bush tax cuts last fall. A Congress dominated by mindless cannibals is now feasting on a supine president. But surely even he now realizes there’s no middle ground with antagonists whose only interest is in seeing him humiliated.

More real fun is going to come later in the year when a new federal fiscal commission tries to come up with a plan to solve the federal government’s money problems.  If it’s anything like the most recent such commissions, it will find that cutting the budget just can’t produce enough savings to right the ship and it will also look for equitable ways to increase revenue.  It could start by checking this week’s local paper: Ezra Klein outlines a plan for Democrats to boost revenue by negotiating like Republicans, and Charles Krauthammer offers a very rational outline for reforming and simplifying taxes so our representatives in Washington could have a fresh starting point on the coming negotiations on tax rates and entitlement reforms…and they are coming.