Commentary

President Obama faces a budget obstacle in his plans to rebuild crumbling bridges and address other pressing infrastructure needs. Unlike many governments, the United States does not have a separate budget for capital spending, which means each tax dollar is as likely to go to the construction of, say, a courthouse, as it is to paying the salary of a judge or court clerk who works there. What would having a separate capital budget do for the country? For starters, it would rationalize our spending and make it more difficult for lawmakers to lard up spending bills with long-term projects.

So, there's some sort of football game this weekend. Like many economists, I’m a bigger baseball fan than football, intrigued by the statistics in baseball, statistically a zero-sum game unlike most other sports. Just about every positive statistic in baseball for one player has a corresponding negative statistic for another.

Two housing reports in the week just demonstrated, yet again, economists are not infallible. On Tuesday, the National Association of Realtors (NAR) reported existing home sales for December: 4.94 million against a consensus forecast of 5.1 million. Then on Friday, the Census Bureau and HUD reported jointly 369,000 new homes were sold in December compared with a consensus forecast of 388,000. There are several important housing related reports due out next week, but they will take a backseat to the report on fourth quarter GDP and Friday's report on the employment situation.

The disagreement over the nation's borrowing limit took a back seat to gun control and perhaps lost some urgency when House Republicans floated the idea of a temporary extension, which would do what Washington seems to be famous for--kicking the can down the road. But, the controversy and its impact on the nation's financial credibility demands a solution that will last for more than just a few months. Just a week after unveiling new rules for mortgage originations, the Consumer Financial Protection Bureau stepped up its game by turning to the other end of the mortgage business, collecting on loans.

President Obama opened a big hole in his White House by tapping Jack Lew to replace Timothy Geithner as Secretary of the Treasury, leaving empty for the moment the role of Chief of Staff. Meanwhile, it may take a while before the impact of the long-awaited Consumer Financial Protection Bureau's rules on qualified mortgages will be felt. The CFPB heard the pleas of lenders and housing advocates to avoid taking steps to slow the incipient housing recovery.

It may not have been a fiscal cliff, but how about a fiscal mudslide? The deal reached by Vice President Joe Biden and Senate Minority Leader Mitch McConnell and forced down the throats of House Republicans (without involving their leader, Speaker John Boehner) wound up to be a glorified version of kicking the can down the road--a short road, as the next ""crisis"" comes in just two months, when the nation runs up against the debt ceiling. Too many words have already been written about the crises manufactured by setting arbitrary deadlines.

Negotiators in Washington face a dismal weekend leading up to -- and perhaps including -- New Year's Eve, made worse because they're trying to solve the wrong problem. They're wrangling over how to avoid the fiscal cliff when a series of laws aimed at or contributing to the nation's deficit are set to expire, complicated by Treasury Secretary Timothy Geithner's pronouncement the nation is approaching its debt ceiling.