I was at the Treasury Department yesterday afternoon for one of these double super-secret background briefings with the Secretary and other senior officials. What I learned:
— 1. Treasury sees the benefits of focusing on the deficit as political rather than macroeconomic. Not in the “low politics” sense of trying to get a 1 percentage point boost in the polls, but in the “high politics” sense that you need to engage on the long-term deficit to avoid political momentum shifting sharply in the direction of contractionary short-term fiscal policy.
— 2. Treasury is distressed by the inability to get Federal Reserve Board and other economic policy officials confirmed. They think this is a serious problem, and they don’t have confidence that there’s a workable strategy and their disposal to resolve it.
— 3. Treasury claims that HAMP is currently working well, though it wasn’t necessarily working well in the past.
So that’s for your consideration. I dunno.