The New Fiscal Consensus Is an Accident Waiting to Happen

Observers calling for a more consensual style of American politics were dealt something of a corrective by President Trump and Congress this week. Republicans and Democrats agreed that public spending and public borrowing should rise a lot faster than previously promised. For the moment, it seems, fiscal indiscipline is a bipartisan endeavor.

Granted, there’s one good thing about this agreement, and it’s important. The deal postpones for a couple of years the next debt-ceiling-and-government-shutdown crisis, which Congress and the administration had previously penciled in for September. Threatening financial markets from time to time with deliberately induced calamities is a proven failure as a way to contain spending pressures. It also needlessly destabilizes the economy, and makes the Federal Reserve’s difficult job even harder.