Opinion

Gregg Easterbrook

Facing down the debt

July 20, 2011

Over the past three generations, America’s leaders have faced down the Depression, won World War II, won the Cold War, created Social Security and Medicare, passed the Civil Rights Act and dramatically expanded environmental protection. The record is one of boldness and triumph.

Today, America’s leaders face the challenge of reducing giveaways to special-interest groups. That is what the national debt issue boils down to — do Congress and the White House have what it takes to say “no” to interest groups that want to be showered with borrowed money?

Anybody can agree to a giveaway. In politics, nothing is easier than handing out bags of candy while making empty promises about fiscal discipline in the future. No mettle is required endlessly to say that this year everybody gets everything they want but look out, next year we get serious.

Saying “no” is often the essence of leadership. To address the national debt, Congress and the White House must say no to tax favors for the affluent, no to Social Security benefits for people who don’t need them, no to a defense budget that lacks discipline, no to the pass-along mentality of health care, no to handouts for agriculture, for the states, for programs that feather someone’s nest but make no sense. (Such as $200 million in subsidies per year to fly mostly empty planes to towns only an hour’s drive from a large airport.) No to the countless interest groups that want fiscal restraint in other people’s programs, but view their own handouts as a super ultra-crisis.

Ponder what American leaders of the near past have overcome, and you’ll feel something close to shame that today’s leaders depict merely reducing giveaways to special-interest groups as a challenge of epic proportions.

The threat before the nation is not hostile foreign powers or racial hatred — the threat is our own political system’s lack of accountability for giveaways. The beast that must be tamed is quite timid compared to beasts of the near past. Yet the country’s leaders fear the slightest step in its direction.

Threats such as World War II and the Cold War were external in nature, and human nature often responds more readily to external concerns. The national debt threat is internal, arising from faults in ourselves — in our political system’s demand from unlimited champagne today, with the bill sent to future generations.

No sinister outsiders forced the national debt on us: we did it to ourselves, with eyes open. We borrowed and spent as if tomorrow would never come — and now it’s here. Just eight months ago, in December 2010, President Barack Obama and the leaders of Congress — including the House Republicans leaders now crying disaster about the debt ceiling — enacted $930 billion in new tax favors, giveaways and handouts. Knowing the national debt was getting worse fast, they agreed to borrow-and-spend in an irresponsible manner.

No outsider forced this on us — we did it to ourselves.

Have our leaders the courage possessed by American leaders of the near past, the courage to do what the country needs regardless of what is popular? Have our leaders the courage to ask for shared sacrifice — with the rich, the middle class, entitlement recipients and corporations all surrendering something?

Can Barack Obama, John Boehner, Harry Reid, Nancy Pelosi and Mitch McConnell show us they have so much as one-half the leadership strength of their forebears who faced down Communism and brought civil rights to the whole of the nation?

Stated in today’s dollars, one decade ago the national debt was $6.9 trillion. Today it is $14.3 trillion — meaning that adjusted for inflation, the United States has borrowed more money in the last decade than in its previous 212 years of existence. And this has been done when there is no national emergency! The country has all manner of problems, but faces nothing remotely like the emergency of World War II.

The runaway borrowing has occurred under Republicans and Democrats, beginning with George W. Bush in 2007, who launched the ruinous Iraq adventure based entirely on borrowed money, and continuing to Obama, who has backed three “stimulus” giveaways despite clear evidence that this doesn’t work. At the current pace, the national debt will hit $23 trillion in 10 years,  meaning the country will have borrowed twice as much in two decades as in its previous 212 years of existence.

Worse, the runaway borrowing has occurred before the baby boomers retire. Americans have known for decades that starting around 2015, spending for pensioners and their health care must rise. Rather than save in preparation for that day, the nation’s leaders of both parties have spent with abandon. When the young borrow to spend wildly, society calls that irresponsible. When the middle-aged borrow to spend wildly, they call themselves presidents, senators, representatives and governors.

The national debt is not only bad in and of itself — surely economic recovery is being held back by the unchecked debt. Investors perceive U.S. leadership of both parties to be self-absorbed and unconcerned with the greater good, so they ship their capital to nations with better long-term prospects.

Previous generations of American leaders saved the country from grave predicaments. The current generation is asked only to reign in giveaways. Do the people in Washington have this in them?

 

Comments
10 comments so far | RSS Comments RSS

This should be required reading for all elected and appointed officials

Posted by Thiggy | Report as abusive
 

After the 2010 elections, the supposition was that President Obama would be forced to become more Clintonian, making moderate compromises with Republicans in Congress and all that. It’s hard to tell if he’s been successful at that, although the public perception seems to be that he has not. It may not be for a lack of trying; it seems, with the debt situation getting ever more serious, that he’s been willing and able to give and take with enough Senate Republicans to make some progress. Whether or not “compromise” is possible with a Republican House that seems to have a motto of “No Compromise” obviously remains to be seen

I will add that I was a summer intern in Washington in 2008, working in a financial institution trade association right before the Fannie Mae/Freddie Mac “bailouts,” and heard, in person, Barney Frank casually say that the bailout would come with a raise in the debt ceiling, as though that sort of thing should just be automatic and routine. Keep in mind that this was July 2008, so the (correct) assumption was that President Bush would casually sign off on that action as though it were automatic and routine. At least today, the matter has been up for serious public debate – in 2008 I suspect most Americans were totally unaware of the debt ceiling at all.

Posted by DFChapel | Report as abusive
 

Careful, Gregg. You almost sound like a tea partier.

Posted by ThoughtsforFood | Report as abusive
 

These are a few of the ways to correct our government’s excesses: enact Term limits (5 2 yr representative terms, 3 6 yr senator terms), vote on and pass a balance the budget amendment, eliminate health plan and pensions for our congress ,congressional staff has same health insurance availability as general population, make trading on insider information by representatives of the people an offense punishable with 5 years of prison and loss of all the capital gained in such trading.
Without these change we can look forward to being scammed by the elitists of government and their funding sources.

Posted by clc123 | Report as abusive
 

Let’s talk possible solutions: 4 day work weeks (32hrs) for most/all non essential government-saves jobs and it’s the green thing to do! Also, raise sin taxes on alcohol, gambling and porn- the industries that could never pay enough taxes for the harm/costs they create! Too many chiefs and too many indians in government too- 1 out of 5 work in gov now, more than manufacturing and construction combined! Our debt starting next month will exceeed 100% of TOTAL US GDP and is greater than 25% of all the world debt! It’s a crisis, make the mental adjustment and embrace change! Honesty is the best policy!

Posted by DrJJJJ | Report as abusive
 

Note: you’re minimizing the magnitude of 911 FYI! More died @ 911 than Pearl Harbor that started WW2 and we’ve been killing terrorist since we arrived, so it looks like we got the location right FYI! Need to send them a bill for $1 Trillion for service/debt/lives rendered!

Posted by DrJJJJ | Report as abusive
 

Two points that should not slide by:

“surely economic recovery is being held back by the unchecked debt” – the recovery is being held back by lack of demand. Interest rates remain near zero. Major corporations are sitting on mountains of cash. I’ve been in any number of meetings with $1b+ companies in the last two years, and the national debt has never come up in a business plan. It’s easy to take pot shots at “spendthrift” consumers, but there is no investment without the prospect of consumption, and domestic demand is crippled.

“so they ship their capital to nations with better long-term prospects” – A big chunk of our debt is financed externally, meaning other countries are actually shipping their capital to us, and bidding up our bonds in the process.

The key metric should be debt-to-GDP. The numbers mean nothing by themselves.

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