January 20, 2013
People have an incredible knack for self-preservation that nations sometimes, surprisingly, lack.
The United States of America is not unalterably locked into future bankruptcy, taking you and me and hordes of other innocents down together. But the road to that fateful — if not in ways fatal — day now lies stretched before us like a superhighway.
Indeed, it is the path of least resistance.
For all the bitterness in Washington these days, Ezra Klein wrote last week in the Washington Post, its easy to miss the broad consensus that undergirds our contentious politics.
That consensus, as Klein notes, has Democrats victorious in the debate over what the government should do (everything!) and Republicans mostly prevailing on how much the government should tax. Sadly, the two sides of that equation dont come anywhere near to adding up.
So, the federal government still does today everything it couldnt afford to do yesterday and promises to do much, much more it cant afford tomorrow. Sure, it will tax rich folks just a little bit more for their obnoxious success, but it will carry on as usual, plunging ourselves more than $1 trillion further into debt each year. This despite the fact weve already piled up nearly $17 trillion in debt, tripling our national IOUs in the last twelve years.
Even if the men and women elected to Congress, and thrust into the role of money managers at our Madoff-on-the-Potomac, see the fiscal catastrophe approaching, will they speak out? Will they demand spending cuts, impose (foolishly, in my view) tax increases, or reform the entitlement programs that account for nearly two-thirds of all federal spending?
They havent yet. Even knowing that Medicares trustees just announced the Medicare spending will outstrip Medicare payroll taxes by 2024.
In fact, the most often hurled charge during last years campaign by both Republicans and Democrats, was each claiming that the other was trying to cut $700 billion from Medicare. If only it were true! This seemingly massive cut, which helped make Obamacare look fiscally less damaging and then was accepted in Paul Ryans budget, is largely a phony promise to make phantom cuts, stopping fraud and waste — just like theyve been promising with no noticeable result for decades.