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Wednesday, April 13, 2011

DOA: "Debt Failsafe"

A decade ago, Robert Rubin declared that systems to adjust current tax rates automatically based on fluctuations in revenues due to economic performance were bust, because they could be gamed.

So too, "Debt Failsafe".

Unless, maybe, the "failsafe" is to raise taxes. Why? Because everyone is incented, perhaps, to avoid that.

Otherwise, promising "across the board spending cuts"? That's not a "failsafe". That's a candy jar, to some...