This is too funny. Just skim these, in this order:
1) Lira explains his shocking new discovery, based on new philosophical developments: Apparently voters irrationally vote for high spending and low taxes, even though any individual should know that this is unsustainable. Lira actually claims that this is something economists cannot explain.
2) Wenzel says of course economists have been studying this type of thing for either decades or centuries, depending on how you classify it.
3) Lira explains why Wenzel and his merry band need extra-strength prescription on their eyeglasses. My favorite quote:
The discursive dilemma [the concept Lira borrowed from philosophy to explain fiscal deficits] has absolutely nothing to do with the Tragedy of the Commons [the concept from biology/economics that Wenzel said had anticipated Lira’s “discovery”]—the discursive dilemma is about group agency: The will of a group of people, and how it is not necessarily the same as the will of the individuals who make up the group—how indeed, the group agency can go directly counter to the agency of all of the individuals making up the group.
To repeat, Lira is saying that this type of analysis–how individual, rational preferences can lead to crazy outcomes in democratic elections–is something that economists have no clue about, and that he has finally explained, for the first time ever, on his blog yesterday.