<html> <head><style type ="text/css">body { font-family: "Bloomberg Prop Unicode I", Verdana, sans-serif; font-size:125%; letter-spacing: -0.3pt; color: #FF9F0F; background-color: #000000; text-align: left; } p {line-height: 1.25em; max-width:900px; width:expression(document.body.clientWidth > 900? "900px": "auto" );} h1, h2, h3 { text-align: left; font-weight: normal; color: #FFFFFF; } h1 { font-size: 130%; } h2 { font-size: 115%; } h3 { font-size: 100%; } #bb-style { font-size: 90%; max-width:900px; width:expression(document.body.clientWidth > 900? "900px": "auto" ); } b, strong { font-weight: bold; } i, em { color: #FEC54A; } pre { font-family: "Andale Mono", "Monaco", "Lucida Console"; letter-spacing: -0.3pt; line-height: 1.25em; } table { border: 0; font-size: 90%; width: 100%; margin-left: auto; margin-right: auto; } td, tr { text-align: left; } td.numeric { text-align: right; } a:link { color:#53B2F5; text-decoration: none; } a:visited {color:#53B2F5} a:active {color:#53B2F5} a:hover {color:#53B2F5} </style> </head> <body> <p>By Caroline Baum</p> <p>Watching the finger-pointing going on in Washington from members of the supercommittee and the kibitzers on the side reminded me of Milton Friedman's solution for the Federal Reserve.</p> <p>The late Nobel laureate, he of "Chicago School" fame, said he would replace the Fed with a computer that would print a specified amount of money each year to add to the money supply. He said the Fed had a few periods of good performance but for most of its existence has been a "loose cannon, and not a source of stability."</p> <p>Imagine what he'd say about Congress. The Joint Select Committee on Deficit Reduction, as it is formally known, was charged with finding a minimum of $1.2 trillion of deficit reduction over the next 10 years by Nov. 23. Failure to deliver a plan, which would be subject to an up-or-down vote in Congress, would trigger an automatic $1.2 trillion of spending cuts, divided equally between defense and non-defense, beginning in 2013.</p> <p>The two sides of the 12-member committee seem to be dug in.</p> <p>Republicans aren't budging from their offer to increase tax revenue by $300 billion in exchange for lower tax rates while Democrats oppose entitlement cuts that hurt the middle class without higher tax rates for top earners.</p> <p>Lawmakers in the House and Senate were even considering ways to prevent the sequestration should the two sides fail to reach a deal. Talk about kicking the can down the road and the road kicking the can back. Friedman was right: A computer could do better.</p> <p>(Caroline Baum is a Bloomberg View columnist.)</p> </body> </html>