Larry Summers, the Administration's top economist (and former CRFB board member), has an op-ed in the Financial Times today, looking at why the current debate in Congress muddies the fiscal waters.

Opens and Tours – Americans did not fare well in sporting events across the pond this weekend; leaving us Yanks to rely on past memories of success at the British Open and Tour de France as well as the understanding that our economy is not quite as bad off as those of the countries that are beating us. Meanwhile, lawmakers in Washington continue to negotiate treacherous links and steep climbs in the quest to complete legislation.

According to the Council of Economic Advisors’ (CEA) quarterly report on the continuing effects of the American Recovery and Reinvestment Act (ARRA) (see our analysis of ARRA here), the magnitude of the fiscal stimulus and its positive effect on the U.S. economy have been increasing substantially in the first half of 2010 (from $108 billion in Q1 of 2010 to $116 billion in Q2).

A few days after Senate Republicans jumped on board the Sessions-McCaskill bandwagon, 58 House Democrats called for greater restraint of spending and the offsetting of new stimulus spending in the long-run.

Rep. Adam Schiff (D-CA) leads this group of Democrats, who put an emphasis on the strengthening of budget enforcement mechanisms. The letter says about PAYGO:

Under the radar due to other priorities, the Senate has taken up its version of a small business stimulus bill. The bill combines two different small business bills that passed the House last month (one that created a lending fund and one that would provide tax breaks).

Running for the Exits – The “Running of the Bulls” has begun in Pamplona, Spain. Combine that with the celebrations over the country’s World Cup victory yesterday and you have quite a volatile mix. Washington has its own precarious situation, though not nearly as colorful or fun. A full agenda and little time on the Congressional calendar will make for a hectic rush, especially in the Senate. Congress returns this week from its July Fourth recess with a small window before it leaves again for a month-long August recess.

Here are the highlights from this weekend’s editorials on fiscal and budget policy:

The Denver Post said that although they opposed a large stimulus package, they did not believe that Congress should penny pinch on the unemployed in the current economic situation. Noting the recent upward trends in unemployment claims, they believed that it was important to extend benefits in an economic climate where "even the most talented and ambitious job-seekers" cannot find a job. The Post believed that the benefits of extending unemployment benefits outweighed the costs of not paying for them.

After the Fireworks – The Independence Day celebrations have concluded. The fireworks have fizzled and most of us are back to work. Capitol Hill is quiet after its own pyrotechnics last week as lawmakers tried to finish work on some contentious issues before its recess this week. It failed to get many of its tasks fully completed as disagreements on how to fund legislation continued to bog down the agenda.

The CFR has a paper out called "How Dangerous is US Government Debt?", looking at the possibilities of a spike in interest rates in the future. They noted that there were many domestic factors that pointed to such possibility, and potential volatility with regards to foreign inflows.