Gregg Easterbrook

Action by the debt-reduction ‘super committee’ is due in less than a week. You will not be surprised to learn the super committee may only announce grandiose goals, while “deferring” specifics to some unspecified future point.

If, after months of hype, the super committee turns out to be a Potemkin committee, taking no action against the tide of government red ink, here is what will happen: Absolutely nothing.

That’s why falling dangerously arrears on national fiscal policy is so seductive – in the short term, nothing happens. Greece, Italy, Portugal – their governments made irresponsible decision after irresponsible decision, and nothing happened. So the irresponsible decisions continued.

America’s political leadership can continue to act irresponsibly about money for years to come, and absolutely nothing will happen … until it’s too late.

Consider an analogy to household finances. My wife and I are squares about money. We borrow conservatively, repay early, plan cautious budgets and won’t buy anything unless we know we can cover the cost within a short time. The result is a nice house that’s mostly our own equity, plus retirement savings and a strong credit rating. In fiscal terms, we are pretty much where the United States was a quarter century ago.

Suppose I ran out and bought a high-end sports car for me and a diamond brooch for her. This would be irresponsible, especially from the standpoint of our three children. What would happen the next day?

Absolutely nothing. I could break years of rigorous self-discipline about debt and short-term outlook, but pay no penalty at all.

Observing that nothing happened, suppose I then take my wife on a luxury world tour – first-class flights, presidential suites, Bollinger ’75. I could just sign for it, no questions would be asked. What would happen? Absolutely nothing.

I could go on like this for quite a while, overspending without restraint. The sun would continue to rise. It would seem nothing was going wrong — until my family’s finances were ruined. By the time that point had been reached, it would be too late.

In most of its history, the United States government has been conservative about debt. The nation had to borrow significantly during the early 1940s, but responded with a strict focus on repaying that debt quickly during the late 1940s and early 1950s. As recently as the Reagan deficit years of the early 1980s, there was bipartisan consensus that significant borrowing should be a temporary policy only. In the late 1990s and first two years of the 2000s, the national debt declined as the budget went into surplus and Congress resisted the impulse to overspend.

Then, beginning in fiscal 2003, discipline went out the window. The FY 2003 deficit of $378 billion was considered shocking at the time — the worst, in current dollars, since World War II. Every year since then, save fiscal 2007, has seen a federal deficit that would have been shocking in any previous decade. Yet nothing happened! The sun still rises, and other nations still lend the United States money.

When Congress and the White House discovered they could borrow recklessly and nothing bad seemed to happen, forbidden fruit had been tasted. Since then, neither Republicans nor Democrats in Washington have shown restraint. Republicans want lower taxes and more corporate welfare, Democrats want more spending for their party’s interest groups. Both sides keep ordering cases of champagne – and nothing happens … in the short-term, that is.

Currently the plan is for trillion-plus annual deficits as far as the eye can see. Even if the super committee achieves its mandate of reducing the deficit by $120 billion a year – a “draconian” reduction equivalent to 3 percent of annual federal spending — the national debt still would be projected to bloat from $14 trillion today to $19.6 trillion in a decade.

But the White House and Congressional leaders of both parties know that if the super committee fails, nothing will happen right away. Supposedly automatic budget cuts would be triggered. But they would not take effect until 2013, ensuring that for now, no program is cut and no tax is increased. Waiter, more Bollinger!

Then, in 2013, waivers for the “automatic” cuts could begin. Timothy Noah noted recently in the New Republic that the Gramm-Rudman balanced-budget act, passed to considerable theatrics in 1985, on paper imposed automatic cuts if Congress overspent or under-taxed. The rules proved toothless when lawmakers “realized they did not need to take the law seriously,” and started passing waivers. Same with the Pay-Go legislation enacted to great theatrics again in 2007. On paper it requires disciplined spending – but nearly every appropriations bill since 2007 has included a Pay-Go waiver.

The supposedly mandatory, automatic cuts might later be quietly repealed. Among the most important public policy books of the last decade is Reform at Risk: What Happens After Major Policy Changes Are Enacted, by Eric Patashnik of the University of Virginia. This 2006 book details how Congress enacts what appear to be super-dramatic reforms, but as soon as the media spotlight shifts elsewhere, lobbyists and committee chairs quietly undo the reforms by repealing sentences or paragraphs of the legislation. Often the repeals are hidden in seemingly innocuous “technical corrections” bills deliberately worded so as to be incomprehensible. The supposedly mandatory super committee spending cuts may disappear in this fashion.

A core reason why Washington keeps borrowing too much, and taxing too little, is that national leaders know that if they behave irresponsibly, in the short term nothing will happen.

In the long term, though, the United States will become Greece. At that point, it will be too obvious for Washington to deny what has happened, and it will also be too late to do anything about it.

Photo: An aide peeks in the committee room door as Democratic members of the ‘super committee’ wrap up a meeting at the U.S. Capitol in Washington November 16, 2011. REUTERS/Jonathan Ernst

Maybe Washington can start paying invoices with $3 bills — because the “dramatic” agreement to “reduce the national debt” is as phony as a three dollar bill.

Weeks of nearly round-the-clock negotiations among the White House, House and Senate have led to an “historic” debt deal that consists almost entirely of fluff, doublespeak and empty promises.

The politicians involved get to claim victory, and presumably will be rewarded with votes and campaign donations from the special-interest groups that, pretty much across the board, were spared any pain. Young people of the United States once again are hammered. If the deal becomes law, the national debt will rise again dramatically, while there’s no guarantee any cut will materialize — and the bill for this recklessness will be passed along to those under age 30.

Consider:

* The closest thing to a tangible “saving” in the agreement is $1 trillion in caps on discretionary programs, spread over 10 years. The new national-debt ceiling allows borrowing to rise by $2.4 trillion, with a plan to pay back less than half that amount over 10 years.

Get it? A huge surge in spending now is called a “spending cut,” while actual cuts don’t take effect for up to a decade. And that’s setting aside that inflation means the present value of money spent today sharply exceeds the value of smaller cuts many years in the future.

* In December 2010, the White House and Congress agreed to $930 billion in fresh deficit spending, as the fourth stimulus plan enacted since the 2008 recession. When special-interest groups say they want a “second stimulus,” remember, we’ve already had four. So $930 billion in extra borrowing right away is followed by a plan for about the same amount in savings years in the future. This is what Democrats and Republicans alike today are calling “fiscal discipline” or “draconian cuts.” If you emptied your bank account today but declared you would become careful about money 10 years in the future, people would laugh at you.

* By projecting the only tangible savings — which aren’t even specified, but are merely caps — into the future, the plan allows Congress to cancel them. In 2012 or any future year, Congress will say, “We can’t have caps this year because of the [INSERT ANY WORD CHOSEN AT RANDOM] crisis. We are postponing action till next year.” Rinse and repeat.

* The deal raises the federal borrowing ceiling by $2.4 trillion. This means Congress will immediately spend another $2.4 trillion. That basic point is being overlooked.

You’ve got a debt ceiling on your credit card. The ceiling is there for emergencies, and all responsible borrowers work to stay below their credit ceilings. Experience with the national debt ceiling, by contrast, shows that every dollar of available debt is always spent. Announced in doublespeak as a “savings” plan, this deal guarantees the national debt will rise another $2.4 trillion. The moment the deal becomes law, members of Congress from both parties will see an added $2.4 trillion in the cookie jar and begin raiding.

* A new “joint bipartisan committee” will be charged with identifying another $1.5 trillion in cuts. Doing nothing today, while appointing a committee that will make the tough decisions later, is one of Washington’s worst traditions of pure phoniness.

The president, Speaker of the House and Senate Majority Leader just negotiated nearly round-the-clock for weeks and they couldn’t even agree to cut programs that are transparent boondoggles. So bring in the special committee! This is total abdication of leadership by the president and both political parties.

* Will the bipartisan committee have the stones to impose cuts? Since January 2007, Congress has already been operating under Paygo rules, which specify no more deficit spending — unless waivers are issued. Waivers are always issued! The national debt has increased by $6.6 trillion since Paygo “discipline” was “imposed.” Likely outcome: the bipartisan committee holds somber meetings and recommends cuts, then Congress issues waivers, citing the [INSERT ANY WORD CHOSEN AT RANDOM] crisis.

It’s been a mere nine months since the last bipartisan deficit commission issued its recommendation, and those findings have been totally ignored by the White House and Congress. In a postmodern touch of humor, the last bipartisan deficit commission titled its findings “The Moment of Truth.”

* Won’t the proposed balanced-budget amendment fix the problem? Assuming such an amendment passed Congress, it must be ratified by three-fourths of the states. There’s no chance of this — because the states love deficit spending! Nearly 40 percent of state and local government spending is financed by the federal government — Washington borrows, then ships money to the states. If a federal balanced budget amendment went into effect, the states would have to fund themselves, rather than rely on Washington for free cash (all the while denouncing “the big spenders” in D.C.).

Calling for a balanced-budget amendment is classic political delaying tactics, since even a successful amendment would require many years to ratify. Nothing stops Congress from balancing the budget right now.

* Congress continues to drive the nation deeper into debt when there are many problems but no national emergency, and before the Baby Boomer retire. Extra borrowing sure hasn’t fixed the economy. Japan’s example shows that undisciplined borrowing slows economic recovery by causing business to think the nation is going downhill, and thus to hoard cash rather than invest. That’s precisely what is being observed in the United States right now.

* The worst aspect of the phony-as-a-$3-bill national debt deal is that the middle-aged men and women who run Washington are acting irresponsibly, then passing the problem along to their children. What kind of adult harms the future of his or her own offspring?

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?