A country in denial about its fiscal future

The trouble is that, while the economics of give away policies have changed, the politics haven’t. Liberals still want more spending, conservatives more tax cuts. (Although the tax burden has stayed steady, various “cuts” have offset projected increases and shifted the burden.) With a few exceptions, Democrats and Republicans haven’t embraced detailed take away policies to reconcile Americans’ appetite for government benefits with their distaste for taxes. President Obama has provided no leadership. Aside from Rep. Paul Ryan, chairman of the House Budget Committee, few Republicans have.

No one wants to take away; it’s more fun to give. All 2011’s budget feuds — over the debt ceiling, the supercommittee, the payroll tax cut — skirted the central issues. There’s a legitimate debate about how fast deficits should be reduced to avoid jeopardizing the economic recovery, notes Charles Blahous, a White House official in the George W. Bush Administration. But the long-term budget problem, as he says, stems from Social Security, Medicare and other health programs…

An alternative theory is that we’re muddling our way to a messy consensus. All the studies and failed negotiations lay the groundwork for ultimate accommodation. Perhaps. But it’s just as likely that this year’s partisan scapegoating implies more partisan scapegoating. Political leaders assume that financial markets won’t ever choke on U.S. debt and force higher interest rates, stiff spending cuts and tax increases.