First, here is a bit from my Reuters Breakingviews column:<\/p>\n
\nPresident Barack Obama might have stumbled upon a three-step path to financial crisis: 1) admit nation is dangerously in debt; 2) create high-profile deficit commission to find solution; 3) have commission fail. Subsequent market tumult could, of course, force a sudden, dramatic and harsh fix to America\u2019s fiscal ills. But a rush job would be a poor way to solve the country\u2019s long-term financial problems.<\/p>\n
The immediate casualty of failure, however, would be the markets. Recall the House\u2019s first vote against the $700 billion bank bailout in September 2008. The Dow industrials fell an unlucky 777 points in a flash. The bill passed two days later when panic set in on the Hill. Failure of the commission would send a frightful message to investors globally who have continued to buy trillions in Treasuries under the assumption hard budget choices would eventually be made.<\/p>\n
True, a market jolt would again focus Congress\u2019s attention. But that risks a hasty, ill-considered budget fix such as hiking taxes without a structural reform of America\u2019s social insurance system. That would really be no solution at all.<\/p>\n<\/blockquote>\n