In my last blog, I noted what I believe are the key changes we need to make in order to begin the serious work of deficit reduction, and reducing our gigantic and growing national debt: Tax reform, gradual changes to entitlement programs over 25-50 years, and maintained control of discretionary spending. Over the next few weeks, I plan to write about specifics ideas related to each of these topics. But before I do, I think it is instructive to understand some of the impediments to taking these painful steps.
First, is the politics of Santa Claus. Since getting re-elected is the primary focus of most politicians, they know that it’s easier to get re-elected by giving gifts – tax cuts or increased spending/benefits – than taking goodies away.
Conversely, any responsible politician who tries to be an anti-Santa can have a very difficult time getting or staying elected. Many voters are turned off, or even outraged, by talk of tax increases or spending cuts to their pet programs. Consequently, there are very few politicians willing to assume this role. So, nothing gets done. Inaction is safer than action. Since politicians don’t want to look like they are inactive, they grandstand and point fingers instead.
Second, lawmakers of yesterday have tied the hands of today’s legislators. Over the past 10-50 years, Congress has passed laws granting generous benefits, and at the same time cut taxes substantially. It’s no wonder the U.S. has its largest debt of any time other than when we had to spend like crazy to fight and win WWII.
These irresponsible laws have set in place unrealistic expectations. Trying to renege on long-term benefits promised to voters is politically impossible. Trying to raise taxes to pay for these and other unaffordable benefits is almost as difficult, especially in today’s political climate.
Third, neither political party will budge on their agenda. Most Republicans have signed a pledge to never raise taxes – those who do, jeopardize their careers or are crucified. Democrats refuse to make adjustments to any entitlement spending, and some even want to expand eligibility and benefits for these unaffordable mandatory programs. Both parties are locked in a game of chicken and are more willing to crash than compromise.
Unaffordable spending and tax cuts have put America in a fiscal straightjacket, and the three conditions outlined above keep lawmakers constrained. Legislators are allowing these conditions to prevent the burgeoning problem of our colossal national debt from even being addressed.
Rather than do what is right, policymakers strenuously avoid beginning the serious work of crafting a viable long-term comprehensive fiscal plan. Instead of preparing for opportunities and a better future, Congress continues to have huge budget battles rooted in the past. So the gridlock continues, and the national debt continues to grow.
The longer we wait to begin work on reducing our massive debt, the harder it will be. Because the path we are on is unsustainable, the further we go down it the worse the problem becomes, and the more difficult and painful the solutions will be.
We must restore fiscal responsibility. This enormous national debt threatens our security and greatly reduces our flexibility to address current and future needs. To get back on a better path, we need to take the steps mentioned in the opening paragraph. We cannot tax our way out of this dilemma, and we cannot just cut our way out – we need a serious and thoughtful comprehensive fiscal plan.
Lack of courage and will are not in keeping with American tradition. The type of political grandstanding and gridlock we are experiencing today is more suited to a declining nation, not the greatest country ever known to mankind. We need leaders who are willing to tell painful truths and tackle the difficult challenges we face.
Links to related blogs:
Building a Strong Economy: http://www.commonsensecentrist.com/building-a-strong-economy/
Greece’s Troubles: http://www.commonsensecentrist.com/what-america-should-learn-from-greeces-troubles/
China’s emergence as largest economy: http://www.commonsensecentrist.com/a-coming-new-order-in-global-financial-systems/
China and U.S. national debt: http://www.commonsensecentrist.com/china-why-deficits-and-the-u-s-national-debt-matter/
Budget concerns: http://www.commonsensecentrist.com/the-federal-budget-were-getting-boxed-in/
Economic growth: http://www.commonsensecentrist.com/growing-the-economy-the-road-ahead/
Fiscal policy: http://www.commonsensecentrist.com/leadership-not-misleadership/
Deficit reduction: http://www.commonsensecentrist.com/passing-the-buck-really-big-bucks-2/