Some Americans might be under the impression that they just watched a lame duck Congress engage in a lame-o budget fight. But Senate Republicans’ stunning defeat last night of the Democrats’ omnibus spending bill was anything but boring.

What our great nation just watched was the Democratic Party preview its political strategy for the next two years. It also watched a united Senate GOP defeat that approach, though not before a handful of Republicans considered walking straight into the Democratic trap. The whole episode was an early peek at the GOP’s biggest challenge going forward.

That challenge is, as it always is, spending. Republicans lost in 2006 primarily because of their profligacy, and they won this year primarily because they swore off that profligacy. It’s that simple—and don’t think Democrats don’t know it. President Obama, Harry Reid and Nancy Pelosi understand that the surest, quickest and most delicious way to undermine their opponents is to tempt them into renouncing their own promises of fiscal responsibility. The added beauty is that Democrats continue to get exactly what they want: bigger government.

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By SCOTT S. POWELL

Today’s auction of 10- and 30-year US Treasury notes and bonds won’t tell us as much about the US economy as auctions used to — because the Federal Reserve has started buying up the notes as part of Fed Chairman Ben Bernanke’s “quantitative easing” effort.

Until recently, a plentitude of bidders for long-term US government debt was a sign the US economy was strong. But Bernanke is buying that debt in what he says is an effort to make the economy stronger.

This has a lot of people nervous — and the news that the Fed may spend up to $800 billion on this, rather than the $600 billion figure initially given, doesn’t help.

Even if the purpose is to stimulate the economy, increase stock prices and lower interest rates, the effect of Bernanke’s policy may be monetizing the nation’s growing debt — printing new money to finance deficit spending.

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