Both sides to blame for not addressing the nation's financial woes

The Republicans are drumming up their "We're broke" mantra, and the Democrats are too scared not to go along. But this business about an imminent fiscal crisis just isn't true, according to Simon Johnson, former chief economist at the International Monetary Fund. Not that the nation isn't in a world of hurt, but Johnson says it's all about untethered banks, out-of-control health care spending, and an antiquated tax system - none of which is being addressed very well in Washington. From Economix:

How does the Republican initiative to cut spending fit in with these budget issues? Not very much is the generous answer. The Republicans' proposed cuts at the federal level are for discretionary nonmilitary spending, but this is small as a percentage of the budget (and therefore of the economy). But the problem here is bipartisan -- as it was with the tax cut last year. None of the leadership on either side is willing to talk openly about how our biggest banks caused great fiscal damage. No one is willing to explain why our health care costs continue to rise. And no top politicians currently champion real tax reform.

The Republicans have seized a moment. To them, this is not really about fiscal responsibility; this is about an opportunity to shrink the size of government. But the Democrats have played perfectly into their hands. The heart of their mistake was the president's refusal to explain clearly how the financial system produced a recession that has pushed up our national debt. Both sides of our political elite have contributed to the sense of fiscal crisis. And as we continue down this path ... we are well on our way to a real crisis.