America avoids financial Armageddon but stays in fiscal hell

Soap operas must run indefinitely and therefore never conclude satisfactorily. So it is with the latest episode of a long-running Washington soap opera—its roughly biennial debt-limit drama—which is wending towards a predictably short-lived conclusion. Having threatened the world with a sovereign default and financial disaster in order to achieve their aims, Republicans in Congress have gathered modest concessions from President Joe Biden and agreed that America ought to honour its obligations, after all. The two sides hammered out a deal to raise the government’s debt ceiling, which will let it resume borrowing money—staving off Armageddon for at least the next 18 months. Republican leaders have called the deal, known as the Fiscal Responsibility Act, a historic victory for budgetary prudence. In reality it does nothing to tackle the main sources of America’s fiscal irresponsibility.