The debt ceiling debate has evolved into one over the size and role of government. It is a debate we should have had a long time ago and we should take this opportunity to make big changes that actually address our underlying problems. Make no mistake though, solving our debt problem without killing this feeble recovery will not be easy. Doing it right requires a coordination of fiscal and monetary policy we haven't seen since the days of Ronald Reagan and Paul Volcker.
If you tighten fiscal policy without an offsetting ease of monetary policy you might get "Brother Can you Spare a Dime" and "Grapes of Wrath". If you tighten up the fiscal side while easing on the monetary side - and you get the mix right - you could get mild inflation and growth. Get it wrong and you could get disco, leisure suits and Jimmy Carter. So we want to get this right; the world does not need any more sad songs, depressing novels, Travolta movies, fashion crimes or sweater wearing Presidents.
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