3-Year Freeze to calm bond markets but will do less about the deficit than HCR

[CreekDog]

which the administration seems to be giving up on --or at least pushing HCR less than the 3-year freeze.

so the question is:

if you are rolling out the 3 year freeze to calm the bond markets about the deficit when simply passing the health care bills would actually do more...

is that really why you are doing the freeze? or do you know what you are doing at all? :shrug:

http://voices.washingtonpost.com/ezra-klein/2010/01/how_dumb_are_the_bond_markets.html


How dumb are the bond markets?

I don't really understand this argument that the spending freeze is about convincing the bond market that Washington has the courage to deal with the long-term deficit. The long-term deficit is almost entirely driven by health-care costs. The White House has made this argument many times before. "Let me be clear," Obama said in September, "if we do not control these costs, we will not be able to control our deficit."

But the administration seems to be backing down on their health-care reform plan. Maybe they'll have a clearer message at tomorrow's State of the Union, but for now, the effort seems to be stalling. Yet the bond markets are supposed to be comforted because the White House is proposing -- which is not the same thing as passing -- some spending cuts that will have virtually no measurable impact on the deficit?

It can't both be true that bond markets are this irrationally dumb and that they understand what a non-security a discretionary spending freeze is.