The global markets are spooked about the long term health of the U.S. economy. With good reason.
Washington/New York/Main Street are spooked about the short and long term health of the U.S. economy. With good reason.
Washington only has one real short term option: When you find yourself in a hole, stop digging. No new tax cuts and no new stimulus packages unless you can figure out a way to (really) pay for them.
And then there is only one real long term solution: Bring in David Walker. He knows the score.
If Walker gets the political cover he needs to operate on the patient now (real easy, especially in an election year), he should be able to cut out the cancer with only a minimum amount of pain.
But if we put the economic operation off again, it's going to hurt a lot worse the next time. And even worse the time after that.
Then who's going to buy all our debt?
And then the barbarians will really be at our gate.