One of my favorite bureaucrats is Sheila Bair, Chairman of the FDIC. She just wrote an excellent editorial in The Washington Post, asking "Will the Next Fiscal Crisis Start in Washington?"
That's a fair question. The fair answer is that the next one might start somewhere else but one is certainly coming out of Washington, and it will be terrible, far worse than the last one!
She lays out the clear economic facts. She cites both current deficit commissions as producing effective solutions. Both have called for entitlement cuts and tax increases.
While economists may quibble about shades of gray, politicians make decisions, and that's the problem. Half of them don't understand economics and the other half is only interested in being re-elected.
Our best hope is that the recommendations of either deficit commission are given an "up or down" vote, meaning no amendments. I don't agree with either set of recommendations 100%, but neither will anybody else. Whatever we do, if we do anything at all, will require pain. However, doing nothing requires far more pain.
The economists of the deficit commissions have almost completed their job. My Christmas Wish is that politicians would step aside, salute, and say "Yes, Sir"!
Don't count on it!
