THE PLANK FEBRUARY 24, 2009
In addition to starting a conversation about our long-term finances, the President probably had two goals for yesterday's fiscal summit: 1.) Preempt a domestic political revolt by voters and pundits who worry he's bankrupting the country. 2.) Convince creditors that we plan to bring our budget into balance (eventually) even though we're spending a lot right now, so they don't lose confidence in the U.S. government and dump long-term Treasury bonds.
It's obviously too early to say if Obama accomplished either goal. But the early signs aren't bad. On goal number one, see David Brooks today:
Deficits are exploding, and the president clearly wants to restrain them. But there’s no evidence that Democrats and Republicans in Congress have the courage or the mutual trust required to share the blame when taxes have to rise and benefits have to be cut. [emphasis added.]
As for goal number two--well, the signal-to-noise ratio may be pretty low here. But, for what it's worth, the yields on the 10-year Treasury note and the 30-year Treasury bond have been mostly inching down over the last 24 hours, which is the right direction.
Update: Those yields didn't quite cooperate this afternoon. Both have ticked up a bit since this morning, and the 10-year is in net positive territory on the day...