IMAGINE you have developed a serious weight problem. Things have been going badly for you, and as a result you have been piling on the pounds; in the past three years your weight has ballooned by a shocking 10% a year. Your advisers all say that this will give you a heart attack: not immediately, but in the next decade or so. What do you do? Not many doctors would recommend a diet confined to items that make up only an eighth of your consumption (and were in any case often rather good for you), while slyly sticking to a plan to increase gradually the number of cream buns and cheeseburgers you eat every day. Yet that is exactly what Barack Obama has prescribed for the bloated American government....
Indeed, the real problem with both Mr Obama’s budget and the Republicans’ proposals is not so much the half-truths and fibs within them, as all the things they both left out. America needs to simplify its tax system and (slightly) increase its overall tax take. It needs to rein in its defence spending, which is currently equivalent to that of the next 20 countries combined. And it needs to tackle the gathering surge in entitlement costs. All these recommendations were made by the deficit-reduction commission that Mr Obama himself set up, but his budget conspicuously fails to take up any of them. Other debt-burdened Western countries have embarked on a stringent diet. America continues to gorge.
Why not show a little leadership? In a routine that is becoming depressingly familiar, Mr Obama’s camp argues that the time for these things is not yet ripe. Rather than set out any bold proposals of his own, the president would rather leave it to Congress. Once congressional Republicans and Democrats have found some common ground, he will work with them.
In fact, a small group of brave senators from both parties is already toiling away to just that end. But neither the president nor Republican leaders have had the courage to support them. In the absence of statesmanship, the chances are that only a crisis in the bond markets will provide the necessary impetus. Economic management by fiscal heart attack is not a very prudent remedy.
~ The Economist, The Latest Cop-Out
Grouch: All I keep hearing out of Washington are more ideas on how to super-size the debt, not how to cut back to the dollar menu. Investors, keep your US bond maturities short.