Friday, October 24, 2014

The Upcoming Elections ... Federal Budget Deficits Decreasing But the Nation's Debt Level Keeps Increasing ... What to Do?

Elections are coming soon and will soon be over. Now that's a happy thought.

The end of silly season also means that the TV ads proclaiming the virtues of the sponsoring 'seller' and the evils of his unworthy opponent will soon be coming to an end as well. And that portends that the candidates will no longer be showing their disdain for We the People openly by "spinning" and putting forth their constant stream of attack ads.

They must really believe we aren't capable of understanding the real ADULT issues confronting America. Either that or they don't understand them. Either way it reinforces my strongly held view that politics sucks. So seeing the end in sight for this year's stupid, silly and somewhat childish election season represents very good news, at least to me.

But the way it is now wasn't always so. Long ago real ideas were put forth and real messages were communicated by our political and nation's leaders. We were then treated like real adults by real adults with a real message. And all this happened long before the modern mass communication media of radio, TV, Twitter, Facebook and the internet came on the scene.

We the People owe much to our Founding Fathers. And in a similar vein, we owe much to the generations that follow us as well. And that obligation includes not living beyond our means, taking on excessive debt and then leaving it behind for our kids and grandkids to pay. That's Un-American, in fact.

Founding Father and our third President Thomas Jefferson argued that loading up the nation with debt and leaving it for the following generations to pay would be morally irresponsible. He said that no nation has a right to contract debt for periods longer than the majority contracting it can expect to live. How times have changed.

The good news today is that our government deficits have been getting smaller. The bad news is that our national debt keeps growing larger with each passing year, and no end is in sight. Nor is one even seriously being discussed. Essentially we're doing nothing to come to grips with our long term demographic, budgetary, taxation and abundance of wasteful and unaffordable government spending. Living within our means and balancing the budget aren't even a topic of conversation these days.

But in the not distant future, we'll have to address at least four simple but profoundly important issues affecting all Americans: (1) get our economy growing strongly again; (2) address entitlements spending; (3) curtail unnecessary and wasteful government spending; and (4) increase taxes by reducing 'tax expenditures.' And that will mean attacking all the politically sacred cows of public education spending from K-12 and college, Social Security, Medicare, ObamaCare, mortgage interest deductibility, post office costs, public sector pensions and other similar matters. It won't be fun, but it will be necessary.

Yes, the Deficit Is Smaller. But That Wasn't the Main Problem has this to say about all that:
Some influential people would have you believe that with the deficit shrinking our fiscal problems are behind us. . . . The White House has been touting the recent two-thirds decline as a major accomplishment. . . .
While the massive deficits of recent years were startling, they were never the country’s key fiscal problem.

Deficits, which grew more than 750% from 2007 to 2009, were a symptom of the near-calamitous economic crisis in which revenues plunged and automatic spending kicked in. Much of the growth in the federal deficit was a sign of just how bad the economy was. . . .

What was needed then and is still needed now is a plan–not for short-term austerity but to address our medium- and long-term debt situation. Policies need to be phased in gradually and designed to support the country’s economic recovery. Unfortunately, we got the opposite: spending reductions that focused on the short term and cuts to discretionary spending instead of tax reforms and entitlement reforms to generate permanent and growing savings....

And while the deficit may well be too low given the state of the recovery, the national debt is much too high. Before the crisis, the debt equaled about 35% of the economy; it has since more than doubled and stands at 74% of the economy. The last time U.S. debt levels were this high the country was coming out of World War II. Then, we had demographics and the global economic situation on our side, as well as a plan to again reduce the debt. Today, however, the plan is to keep on borrowing.

The CBO warned in July that the debt levels the U.S. is headed toward would “reduce the total amounts of national saving and income in the long term; increase the government’s interest payments, thereby putting more pressure on the rest of the budget; limit lawmakers’ flexibility to respond to unforeseen events; and increase the likelihood of a fiscal crisis.”. . .

Medicare’s “sustainable growth rate” is actually unsustainable and should be replaced with a variety of longer-term health-care reforms. Pro-growth, pro-jobs, fiscally responsible policy would include making the highway trust fund solvent to allow for more infrastructure spending by raising the gas tax or other sources of dedicated revenue, cutting other areas of spending, or some combination of the two."

Summing Up

Thomas Jefferson was right. We the People are now very much in debt and have a moral responsibility to do something serious about dealing with it. We owe that, and much more, to both our forefathers and to our kids and grandkids.

In America each generation has the inherent right to set its own path and be free from the fiscal constraints and debts undertaken by prior generations.

The Preamble to our Constitution declares that a fundamental purpose of any generation is to secure the blessings of liberty to our posterity, and not just to ourselves. Our nation of equals is a partnership between those who are living, those who have died and those yet to be born.

It's a "timelessness thing."

Today such things as tax reform and entitlements reform are both essential and long overdue. So is a renewed commitment to providing all, including middle class, Americans a fair shot at living the good life. And those of us who are capable must be dedicated to taking care of the less fortunate among us while living within our means and seeing to it that equal and affordable educational opportunities are accessible to all.

To do anything less would be to shirk our civic duties to both prior and future generations of Americans. We must not allow that to happen.

That's my take.

Thanks. Bob.

No comments:

Post a Comment