A lengthy but worthwhile read from Jonathan Rauch:
A funny thing happened on the way to legislative
gridlock and fiscal meltdown in the past few years. In paralyzed,
polarized Washington, where Democrats refuse to reduce spending without
revenue increases that Republicans peremptorily reject, Democrats have
accepted spending cuts, Republicans have accepted tax increases, and
deficits have come down.
It is true that all of that happened in an
ugly, piecemeal fashion, with the two parties lurching from one
self-created crisis to another. At one stage, Republicans seemed willing
to default on the national debt rather than compromise; at another, an
automatic "sequestration" cut spending in what everyone agreed was a
nonsensical fashion.
Instead of joining hands in the grand bargain so
ardently desired by pundits and much of the public, Congress and
President Obama fought their way through a series of stopgaps, each of
them greeted as disappointing if not appalling.
Yet the results bear pondering. The cumulative
effect of Washington's serial muddling has been to stabilize the
national debt as a share of gross domestic product over the coming
decade, according to Congressional Budget Office projections. The
resulting level, by many accounts, is still too high, and more remains
to be done about long-term increases in health-care spending and other
entitlement costs. But the near-term debt emergency is over.
To get here, Congress cut spending by about
$2.6 trillion over ten years, and raised taxes by about $700 billion
(according to the Center on Budget and Policy Priorities). After
adjusting for padding and assorted gimmicks on the spending side, that
ratio of spending cuts to tax increases looks remarkably close to the
ratio of between 2-to-1 and 3-to-1 recommended by many of the mainstream
economists and pundits who called for a grand bargain.
And at least as important, all of that fiscal
tightening happened at a pace that slowed but did not abort a delicate
economic recovery. Too much deficit reduction would have caused a
recession, aggravating the debt problem; too little would have left the
underlying crisis untended. Unlike Europe, America seemed to have gotten
both the pace and the magnitude of the fiscal adjustment about right.
In short, the system acquitted itself quite
well, and better than any of the individual actors within it — steering a
course between hostile political factions and dangerous economic
outcomes. Somewhere, James Madison is smiling.
