The Fiscal Singularity is Near

i believe congress just voted for the 'doc fix'. that would be an expense that was deliberately left out of obamacare in order to lower the apparent cost. it is clear that the govt is NOT serious about holding down medicare spending.

you may wish to read alesina's apr-10 paper on fiscal adjustment for some comments about the association between fiscal crises and fiscal reform.

The most important part of the report I have yet read for predicting what will be done is on page 20. Quoting:

"Another conclusion of CBO’s analysis was that generations born after about 2015 would be worse off if action to stabilize the debt-to-GDP ratio was delayed from 2015 to 2025. People born before 1990, however, would be better off if action was delayed, largely because they would partly or wholly avoid the policy changes needed to stabilize the debt (leaving aside the negative effects of a possible fiscal crisis or of reduced flexibility for the government to respond to economic challenges, as described below)."

Summary: Except for 18-20 year olds, voters are personally better off by putting off doing anything until 2025, as opposed to doing something by 2015 (or, presumably, even earlier). Considering where we sit today as a result of past voting, I'd suggest there is considerable voter will to continue putting off doing anything painful today.

This is further complicated by the polariziation of solutions into the 2 camps of "solution-by-revenue-increases" and "solution-by-spending-cuts", aka "bigger goverement" or "smaller government", which further conflates fiscal solutions with questions of liberty and the extent of goverment power.