Former Wyoming US Senator Alan K. Simpson, who was Co-Chair of the President’s National Commission on Fiscal Responsibility and Reform, lashed out again today on CNN about the state of American federal politics and the inability to get any sort of fiscal reform enacted.
Granted that former Senator Simpson is a very moderate Republican, whose views on abortion and gay rights are not in tune with the majority of the GOP, but he speaks with authority on the mess in Washington, having co-chaired the commission that proposed a format for reducing the national debt and bringing the federal budget under control - a format that was rejected by everyone, including the President who had asked for it to be done.
Simpson said today that it will be impossible to do anything before the November election about the fiscal cliff America is facing. This is not news, but his commentary was so negative that it made me wonder if anything can be done, even after the election.
His opinion is that everyone in Washington knows full well that the United States is on a collision course with high inflation and high interest rates for federal borrowing if something is not done soon to control the $1.3 Trillion budget (his estimate of the Obama budget by the end of the 2012 fiscal year) and to begin reducing the national debt, which stands at about $16 Trillion. The figure of 41 cents of every Dollar spent by the federal government being borrowed has not come down in 2012.
But, Simpson said, nobody does anything because everyone knows that there is no possibility to re-establish fiscal sanity without making almost every American angry because of one or another program that must be cut or cutback. Add to this the special interest groups that lobby for the loopholes that make their tax burden easier and the problem becomes unsolvable.
And, even if Congress had the fortitude to do what needs to be done -- reduce the budget, reform the tax code, restructure welfare and Medicare programs, slightly reduce the military budget -- the work would be reversed because those who would vote for such reforms would lose their seats in the next election and those elected would understand that doing nothing is the way to stay “elected.” So, it would be back to the loophole and something-for-everybody approach to fiscal affairs.
And so America goes on re-arranging the deck chairs on the Titanic.
But, the Titanic sank, and so will America, if nothing is done to correct past mistakes.
What a horrible mess. How to get out?
Perhaps Mitt Romney will be elected and then will be willing to stake his future to making the needed changes. Perhaps there are sufficient numbers of American voters in agreement with his programs that he would receive enough popular support to do the hard things. Perhaps. But, if Romney fails - and to be clear, if Obama is re-elected, there will be no possibility of fiscal reform - then the House that the Founders built comes tumbling down, sooner or later.
It would be catastrophic to wait for the markets to do the job for America. And, believe me, the markets will do just that. When the tipping point arrives -- when the amounts America must borrow and the interest rates it must pay are no longer supported by those who are now buying US Treasury bonds -- then the markets will turn their backs on America. She will be left to turn in the wind, without funds to operate or protect herself. Think Greece. It is not an exaggerated comparison.
It is a Black Hole of an idea. But, it could happen, if nobody in Washington steps up to the plate and faces the problem head on soon.
Markets hate uncertainty, and that is all that exists in the market communities right now. We have high unemployment, political uncertainty, corporate investment uncertainty, business expansion at a stand still, oil prices fluctuating daily, markets reacting to a simple statement from the German Chancellor while unemployment slipped a few more thousands people (to be revised downward before next Thursday comes along.
ReplyDeleteUncertainty may be an improvement over the false hopes and lies that are being told.
With a step down turn there should be an equally sharp up turn or recovery. On a graph it is represented as a "V" shape. What we are dealing with now is a "U" shaped graph from the 2008 downturn. Therefore we are not at a recovery stage at all. We are lounging around at the bottom of something and possibly looking at another steep down turn in order to obtain a step up turn.
Banks and corporation are cash rich right now. Why are they sitting on the side lines? Possibly the uncertainty of the future. Is 1/6th of the US economy (healthcare) going to be taken over by Obama extreme leftist government after election day. The same people that run the US Postal Service for example. Bush tax cut - here to stay or history in January 2013.
Do you want to go to your doctor and think your at your local Department of Motor Vehicle - remember you last visit there? Not very rewarding was it!
Maybe the clearing of the air will start to take place on November 6, 2012. And if it doesn't start then because Obama is re-elected will there be anyone in Washington DC that will lead the charge. It's hard to imagine isn't it. For most elected officials in the Beltway have their job to consider.
Thank you for another stimulating discussion Casey Pops
Some are saying the debt is so large that it's an impossibility to ever be out of debt. Now that really gives us something to think about. With the dollar worth less than 50 cents now and they just keep printing more paper to make it that much more worthless.
ReplyDeleteWhen does someone say we all have to tighen our belts and get real about getting out of the hole we are in. We can't operate like that in our homes and the government can't either for long. Or are we already beyond the point of no return? Which takes you back to my first sentence.
I think you are right in comparing us to some of the other countries that are in a mess fiscally. You just cannot spend your way out of debt.
I agree something not only needs but has to be done if we are to continue to be the Nation others can count on.
Thanks for bringing it into focus, send it to CNN.
When was the last time we thought anyone was really fiscally responsible to the point they would put their job on the line in Washington, DC?
ReplyDeleteReaders - what makes us accept people that we send to Washington DC that are not fiscally responsible. Our contract with the politicians is not life time guaranteed employment. Our renewable agreement with them is that as long as you represent our beliefs and desires for the direction of our Federal Gov't you can do our bidding. The moment that your stray from representing our values and desire you will be replaced.
ReplyDeleteWhat makes us forget all this is simple - laziness and with some greed.Laziness in the fact that we don't vote in large numbers, we don't communicate with those that w elect, we don't seek out better representation, we don't reject (through legal means) bad legislation, we excuse bad legislators action all too often - WE TOLERATE ALL TOO OFTEN INEXCUSABLE BAD REPRESENTATIVES WHICH EQUATE TO BAD GOVERNMENT WHICH EQUATES TO OUR PRESENT FISCAL MESS.
Maybe term limits are now a serious possibility to be quickly considered. No grandfather clause. House and Senate 12 or 18 years and out. The pool of good people to run this government is plenty full. Being a representative or senator is a resume builder not a career. let then go home find a job, writer a book, be a TV talking head and learn from Gen. MacArthur - "Old soldiers never die they just fade away." Some or most right now need to start fading away.