Does Either Political Party Want to Address the Trilion Dolar Deficits?

Deficits continue to run at annual rates of more than one trillion dollars. There's no end in sight.

In fact, there's not even a discussion among the pols about how we're going to ever find an end to the debt and deficits issues, let alone see one now.

I guess they don't want to upset We the People before we vote this fall. They'd prefer to keep the FUD factor front and center instead (FUD = fear, uncertainty and doubt).

My view is the politicians have it all backwards. It's long past time to talk about this issue openly and honestly. Oh, I forgot, open and honest isn't part of the politicians' playbook.

Political Perceptions: Stepping Up to the Cliff puts it this way:

"This is what fiscal paralysis looks like.

The U.S. government, the White House projected last week, will run a deficit of $1.2 trillion or 7.8% of the gross domestic product in the fiscal year that ends Sept. 30.

And the Commerce Department said last week that the U.S. economy grew at a slow 1.5% annual rate in the second quarter and, the Federal Reserve said Wednesday, has “decelerated.” Private economists don’t expect much of a pick up in the third quarter.

So what has Congress managed to do – either to reduce future deficits or give the economy a lift?

Not much.

The Senate, with Democrat votes, passed a bill that extends the 2001 and 2003 Bush tax cuts for a year beyond their Dec. 31 expiration date – but only on income up to $250,000. The House, with Republicans votes, voted to extend them for everyone.

Neither side expects the other to go along. Neither side expects a bill to go to the president. The votes are more for debating points in this year’s campaign than for deciding what tax rates will be next year.

Five months from now, unless Congress gets something done on the deficit before then, taxes will go up for almost everyone and spending will be cut across the board. That’s the much-dreaded fiscal cliff that Congress and President Barack Obama created last year to force themselves to grapple with the deficit. It doesn’t seem to have worked – at least not yet. (A few people – some of them elected – say the country may have to go over the fiscal cliff before Congress can reach a compromise; a good number of experts say that’s awfully risky, especially given the fragility of the economy.)

About the only thing that Congress has been able to agree on – besides tougher sanctions on Iran, which enjoys the enmity of both parties – is a bill that keeps the government running for the first six months of the fiscal year that begins Oct. 1.

Apparently, the leaders of both parties are agreed that it was in the interest of incumbents to avoid even headlines about a shutdown of non-essential government services. Perhaps that’s progress, but the bill does nothing to avoid the across-the-board spending cuts of the fiscal cliff.

Nothing, the conventional wisdom has it, can happen before the election. But it’s far from clear what’ll happen after the election – and neither Mr. Obama nor Republican challenger Mitt Romney is shedding much light on that. Mr. Obama  wants to raise taxes on those who make more than $250,000 a year, and says he won’t sign a bill that extends the Bush taxes for them. Mr. Romney sides with the Republicans who want to extend the Bush tax cuts for all and then turning to a tax-reform agenda that would raise taxes on some folks and lower them on others —  but not produce more (or less) revenue for the government.

As the presidential campaign heats up, Mr. Obama and Mr. Romney will be asked to explain to voters what they think should be done.  Mr. Romney wants to increase defense spending, which suggests some tough spending cuts elsewhere the budget. Mr. Obama doesn’t. The ads he is running attacking the Romney position on defense spending suggest Obama polling and focus groups find antipathy to defense spending right now.

For all the charges and counter charges, it’s been hard to get the candidates so far to make it possible for the press – and the voters – to see exactly how each of them would deal with the deficit after the election, especially given the need to bring some from the other party along. The deficit-fearing folks at the non-partisan Committee for a Responsible Federal Budget, meanwhile, have an idea for solving that problem. They’re circulating a petition asking the Commission on Presidential Debates and the presidential campaigns to devote one of this fall’s debates to a comparison of each candidate’s 10-year plan for the budget."

Summing Up

The can kicking will end someday soon, albeit probably not until after the election.

I know it will end because it must. As the old truism points out, if something can't go on forever, it won't.

It's the same thing for public sector pension and health care underfunding, private sector union wages that are above rates which make companies globally competitive, city and state budget deficits that habitually are in arrears, and lots of other fiscal issues preventing a solid economic recovery from occurring, which in turn is preventing the jobs market from healing.

The fearful politicians don't want to tell We the People the truth because they don't believe we'd handle it well. My bet is that they're wrong about that.

Soon we'll see. Maybe in 2013.

Thanks. Bob.