Ezra Klein links to a founding document. David Wessel summarizes some of it. It’s complicated and a lot of it will be re-legislated. We still have an OK path forward. It seemed to me that gdp+1 for Medicare does lot of the medium-term work. The entire tax discussion was unclear and I feared that some revenue losses were perhaps not acknowledged. At this point the real questions are about public perceptions, not the principles of public finance as they might be debated by Musgrave and Buchanan. The estimated level of social capital in the U.S. political system will very shortly be revalued, one way or the other.
On Europe, it’s as simple as that. The Greek bond yield topped 39 percent. As I said to a reporter today, France gave birth to it (the euro), faltered and left it on the doorstop of some distant, passive-aggressive German parents, and they are willing to feed the thing but not to pay the bill at Harvard.