Action by the debt-reduction ‘super committee’ is due in less than a week. You will not be surprised to learn the super committee may only announce grandiose goals, while “deferring” specifics to some unspecified future point.
That’s why falling dangerously arrears on national fiscal policy is so seductive – in the short term, nothing happens. Greece, Italy, Portugal – their governments made irresponsible decision after irresponsible decision, and nothing happened. So the irresponsible decisions continued.
America’s political leadership can continue to act irresponsibly about money for years to come, and absolutely nothing will happen … until it’s too late.
Consider an analogy to household finances. My wife and I are squares about money. We borrow conservatively, repay early, plan cautious budgets and won’t buy anything unless we know we can cover the cost within a short time. The result is a nice house that’s mostly our own equity, plus retirement savings and a strong credit rating. In fiscal terms, we are pretty much where the United States was a quarter century ago.