The financial crisis is more important than the budget
Because if "there is no bottom," then the budget figures -- and, for all we know, the systems that deliver what is budgeted for -- are meaningless. So a "very, very good" budget with a very, very bad performance on the financial crisis is like handing in a really good paper in college and then going out and totaling the family car. Heck, running the family car into the side of the house and causing a couple of floors to collapse. Let's not compartmentalize, eh? Krugman once more:
An important article by Gillian Tett about actual recovery rates on AAA-rated CDOs. (They’re worse than even the pessimists thought.)
Why is this important? A recurring theme of those who believe that the financial system can be rescued with fancy financial engineering — a group that, sad to say, apparently now includes the Obama administration — is that the losses on toxic assets aren’t really as bad as people say; that lack of liquidity and “irrational despondence” have led to an undervaluation of these assets, and that if we can just calm things down and get cash flowing again all will be well.
Not so much, it seems.
Anybody know how big the Big Shitpile is, two years into the crisis? Bueller?... Bueller?... Bueller?
Doesn't it make sense that if the Big Shitpile is really smaller then we're afraid it is, somebody would have come forward to say so?
Apparently, it's so bad they can't even try faking an answer -- the bailout money just disappears, to no apparent effect, with nobody the wiser as to where it went or what it did.
NOTE Hat tip jawbone in the link.