Perhaps it sounds too dramatic, but America sits at the precipice of fiscal disaster. Will we reign in government spending and bring our taxes and debt back under control, or will we give in to the easiest and worst of our impulses and keep spending money we do not have and cannot get?
I prefer to be an optimist but I am losing my grip on a positive outlook. I see the potential decimation of Wisconsin Republicans for trying to hold the line on spending. I see the President putting forth budgets that are completely false in their forecasts, full of billions in hidden debt (it produces $7.2 trillion in new debt), and which address none of the core issues that could bring America down. This same President has signed into law a healthcare plan that he calls “The Affordable Care Act” which is completely unaffordable, and it is filled with lies and false accounting. I now see Republicans waning in the House and Senate, their will slowly deteriorating and the possibility that they will give up on addressing entitlement reform.
Why is this happening? There are several answers, but the first and most important is that it is far easier to say “yes” than it is to say “no”. That spending is more popular with most of the American people than “not spending” is. And so Democrats, the President, and now Republicans are seeing that while cutting spending is popular with many Americans, it may just be that there are more election votes in the short term if they spend instead. Not cutting gets more votes than cutting.
Of course this is how we got here in the first place. Politicians have for 2-3 decades been more drawn to pouring money into the coffers of their donors and voters than they were to balancing budgets. But what we face today is different. First, it is an opportunity we haven’t had in 30 years, when large numbers of people are aware of the problem we are facing and support taking bold action to address it. We have hope today that the votes for debt control are approaching the same number of votes for frivolous and/or excessive spending. Second, we are truly now on the precipice. If we do not stop the bleeding soon, our society will be fundamentally transformed from an innovative, free-market economy with a supportive government into a government-dominated debt ridden nation. The result would be much higher taxes (try doubling what we pay today, your sales tax at 12-15%, your state and local taxes at 20%, and your Federal taxes at 50-60%) just to pay off our debt, let alone what is needed for much-needed programs.
This battle is being fought on multiple fronts, in Ohio, Wisconsin, Florida, California, New Jersey, Indiana, and of course in Washington DC.
It is likely there is one factor that can save us from the disaster that is looming: Leadership. We are seeing it best illustrated by Chris Christie, the fearless Governor of New Jersey, who isn’t afraid to say exactly what every other politician knows but is afraid to say. We are also seeing it from Scott Walker in Wisconsin, John Kasich in Ohio, and we have strong glimpses of it from Andrew Cuomo in New York. Where we aren’t seeing it is where we need it most, and that is in Washington DC and California.
The President’s budget is a farce, and he and every thinking person knows it. Republicans, in the meantime, refuse to give in to their game of chicken with the President and just come out and say what needs to be done: We must get entitlement spending under control. They won’t say it because they fear there are more votes in not saying it than in saying it, and they would rather the President lose the votes by leading on this.
It’s time for our representatives in Washington to serve the people and to make tough decisions, unpopular decisions, and to bet on the long-term wisdom of the American people that their bravery will be rewarded with re-election. Or that if it isn’t, they can sleep at night and look their children in the eye knowing they did the right thing for the American people in spite of the political consequences.
Most importantly it is time for the President to lead. While Mitch McConnell or John Boehner could be more brave and try to lead America back to a sound financial ground, the leadership must come from the President. He could do so by grabbing McConnell and Boehner and telling them “I’ll jump first, but I’ll need you both up there with me, a half step behind but clearly with me”. He should find a way to tell the American people the truth and to put policies in place to address the problem, but in a way that puts his future votes and those of McConnell, Boehner, and every other member of the House and Senate that supports prudence on the line. And for those who would answer “The President would do this except that the Republicans won’t go along with it”, I say balderdash. This is what President’s do, what we pay them for, what the Founding Father’s intended for their role. They MUST lead, they must figure out how to make this work. We must also support the President and strongly communicate with our legislative representatives and request that they support the President’s efforts should he launch them.
This will all play out in the next 6 months, and we will be able to make accurate predictions about our financial future based on the decisions that are made during this time. Let’s not miss this opportunity.