The single most interesting point about today’s “debt ceiling” debate is that over the 10-year forecast horizon that frames for the entire discussion, there is simply no fiscal problem by any conventional definition.  In 2021, the US will likely have a small primary surplus at the federal level – meaning that the budget, before interest payments, will no longer be in deficit.

The really bad budget numbers for the US come after 2021 – but these are not the focus of anyone’s current proposals on Capitol Hill.  Compared with other countries, it is the increase in health care spending, 2010-30, that will ruin us ...

The debate in Washington DC is fraught not because anyone is grappling with the difficult issue of how to control health care costs.  Rather the tea party wing of the Republican party is intent on insisting on near term government spending cuts, as a condition of supporting any increase in the debt ceiling.

It seems increasingly likely that some version of this libertarian tax revolt will carry the day. The resulting fiscal contraction will slow the economy and result in fewer jobs being created.  It does nothing directly to address the looming budget issues beyond 2021 – there is no “down payment” on the table, just measures that are tangential to rising health care costs.