The political debate over deficit reduction has moved from the absurd and comical to the simply sad. We need a whole new dictionary to understand the ongoing deficit debate.
If you were to tell most Americans that they had $16,000 in credit card debt on the books and were going to $19,000 in debt this year, they would understand that their debt was growing by $3,000. Washington, D.C., however, would consider it a $4,000 reduction in the deficit, because they had planned to be $23,000 in debt at year end.
And the absurdity just keeps growing. Congress passed a $147-billion tax increase the last time we faced sequester, and claimed it would have no effect on the economy. But a reduction in government spending of $80 billion, as called for in the sequester, is supposed to have catastrophic effects on our economy. I guess it just goes to show that money the government spends is far more important than money consumers and businesses invest/spend.
The biggest fear about sequestration is that the spending reductions will happen and won’t be noticed. Does anyone believe the disruptive cuts in government are the only federal fat that can be found? No, this has become a battle for control of the House in 2014. The opinion polls indicate it’s a winning issue for the Democrats, and they seem committed to doing everything possible to make the cuts as painful as possible. Politically, that might be a good move, but is it in the best interest of the country?
A Closer Look: Fiscal Cliff – A Real Crisis, But Artificial Deadline
Thus, we have threats like the meat inspector furlough that potentially could derail the cattle market for months. And then there’s the release of hundreds of criminals in Arizona this week who were illegal aliens, perhaps endangering public safety. And threats of three-hour security screenings at airports, etc.
The most ironic thing about this whole situation is that everyone agrees the cuts aren’t nearly enough, and that the cuts as proposed are the wrong way to make cuts. Still, there seems to be absolutely no political will to get serious about addressing our debt problem.
The president is back on the campaign trail warning of the coming disaster via the sequester, but no one seems able to detail the calamity that actually will befall us if we don’t address our unfunded liabilities and skyrocketing deficit. Greece, Spain, the former Soviet Union, Iceland, and a host of other countries are good illustrations of what lies ahead, but it’s somehow too big of a problem to address or comprehend in this country.
We all know that not making a decision is, in effect, making a decision; and that if we don’t act, the decision eventually will be made for us. Sadly, this political saga proves much more than that the Republican Party is politically inept, or that the Democrats are politically exploitive. It illustrates just how devoid of leadership and political will the U.S. is today. And that ineptness doesn’t reflect well on the electorate, either.
The old quote about Emperor Nero fiddling while Rome burned is appropriate here. Fiscal conservatives have tried to guide the Republican Party to the right, with the result of seemingly isolating the party and lowering its appeal. Meanwhile, Democrats have moved swiftly to the left, with the tacit approval of the electorate. The result is that government and the federal deficit are growing at unprecedented rates, while we play political games with no real interest in addressing either issue.
The American public deserves better, but then again we’re getting what we deserve. As long as everyone just nods when politicians talk about creating millions of jobs, at a time when millions fewer are actually working, we’ll likely continue to get lies and the reshaping of not only our language, but basic math and economic principles.
In marketing, we like to say that perception is reality. When it comes to finances, however, reality has a way of eventually overcoming perceptions.