As Goes California, So Goes the Nation?
Paul Krugman has a very nice column on the fiscal disaster -- and "disaster" is not too strong a word -- facing California. The Golden State has, as Krugman argues, a survival-level economic threat that's fundamentally the result of a political crisis. And they're not going to be able to solve the one until they fix the other.
The same, he suggests, is true for the nation. There are a variety of economic dangers on the horizon -- notably, the overwhelming rise in health care costs -- but no evidence of a Congress that possesses either the incentives or the capability to make truly difficult decisions. The health reform being discussed now might improve the situation and delay the day of reckoning, but few suggest it will actually solve our problems. The filibuster is too powerful, the minority too ambitious, the majority too risk-averse. Policy, in this environment, must be cautious, and an insufficient victory is better than a noble failure. The probable outcome of that is not a hard equation to run. Just ask California how it's working out for them.
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