Beyond the budget impasse

By Lawrence Summers
October 14, 2013

This month Washington is consumed by the impasse over reopening the government and raising the debt limit. It seems likely that this episode, like the 1995-96 government shutdowns and the 2011 debt limit scare, will be remembered mainly by the people directly involved. But there is a chance future historians will see today’s crisis as the turning point where American democracy was shown to be dysfunctional — an example to be avoided rather than emulated.

The tragedy is compounded by the fact that most of the substance being debated in the current crisis is only tangentially relevant to the major challenges and opportunities facing the United States. This is the case with respect to the endless discussions about the precise timing of continuing resolutions and debt limit extensions, or the proposals to change Congressional staff healthcare packages or cut a medical device tax that represents only about .015 percent of GDP.

More fundamental is this: current and future budget deficits are now a second order problem relative to other more pressing issues facing the American economy. Projections that there will be a major deficit problem are highly uncertain. And policies that indirectly address deficit issues by focusing on growth are sounder in economic terms and more plausible in political terms than the long-run budget deals with which much of the policy community is obsessed.

The latest Congressional Budget Office projection is that the Federal deficit will fall to 2 percent of GDP by 2015 and that a decade from now the debt-to-GDP ratio will be below its current level of 75 percent. While the CBO projects that under current law the debt-to-GDP ratio will rise over the longer term, the rise is not large relative to the scale of the U.S. economy. It would be offset by an increase in revenues or a decrease in spending of .8 percent of GDP for the next 25 years and 1.7 percent of GDP for the next 75 years.

These figures lie well within any reasonable confidence interval for deficit forecasts. The most recent comprehensive CBO evaluation found that, leaving aside any errors due to policy changes, the expected error in projections out only five years is 3.5 percent of GDP. Put another way, given the magnitude of forecast uncertainties there is a chance of close to 40 percent that with no new policy actions the ratio of debt-to-GDP will decline over 25 or 75 years.

Of course, debt problems could also be much worse than is now forecast.

But in most areas policymakers avoid strong actions without statistically compelling evidence. Few would favor action to curb greenhouse gas emissions without evidence establishing that substantial climate change is overwhelmingly likely. Yet it is conventional wisdom that urgent action must be taken to cut the deficit, even as prevailing short-run deficit forecasts suggest no problems and long-run forecasts are within margins of error.

To be sure, there are steps that matter profoundly for the long run that should be priorities today. Data from the CBO imply that an increase of just .2 percent in annual growth would entirely eliminate the projected long-term budget gap. Increasing growth, in addition to solving debt problems, would also raise household incomes, increase U.S. economic strength relative to other nations, help state and local governments meet their obligations and prompt investments in research and development.

Beyond the fact that spurring growth has a multiplicity of benefits, of which reduced federal debt is only one, there is the further aspect that growth-enhancing policies have more widely-felt benefits than measures that raise taxes or cut spending. Spurring growth is also an area where neither side of the political spectrum has a monopoly on good ideas. We need more public infrastructure investment, but we also need to reduce regulatory barriers that hold back private infrastructure. We need more investments in education, but also increases in accountability for those who provide it. We need more investment in the basic science behind the renewable energy technologies, but in the medium term we need to take advantage of the remarkable natural gas resources that have recently become available to the U.S. We need to assure that government has the tools to work effectively in the information age, but also to assure that public policy promotes entrepreneurship.

If even half the energy that has been devoted over the last five years to “budget deals” were devoted instead to “growth strategies” we could enjoy sounder government finances and a restoration of the power of the American example. At a time when the majority of the U.S. thinks that the country is moving in the wrong direction, and family incomes have been stagnant, a reduction in political fighting is not enough — we have to start focusing on the issues that are actually most important.

PHOTO: U.S. Senator Charles Schumer (D-NY) (L) and Senate Majority Leader Harry Reid (D-NV) address reporters at a news conference at the U.S. Capitol in Washington, October 12, 2013. REUTERS/Jonathan Ernst 

36 comments

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“China’s official news agency has called for the creation of a “de-Americanised world”, saying the destinies of people should not be left in the hands of a hypocritical nation with a dysfunctional government.”

Our political parties are seriously hurting the country now. Both of them. We need a referendum vote on Term limits for congress and SCOTUS and campaign finance reform. Nothing more or it will be turned into a never ending argument and we’ll get nothing. Just those two things and all things can be achieved after just one or two election cycles. DEMAND IT!

Posted by tmc | Report as abusive

Well, TMC, you are asking that the Congresspersons not only vote themselves soon out of office, but restrict campaign contributions from the mega-rich corporations and individuals. How would either of those be brought about?

Posted by bcrawf | Report as abusive

In summary, Mr. Summers is promoting the idea that we diminish the political grandstanding within the Beltway, and focus on ways to accelerate economic growth.

Perhaps that might start with the POTUS, who has had five years to do so–including a period when Summers was on his staff of economic advisers.

However, when you have President who is committed to additional government regulation of the private sector and increasing oversight of the activities of individual citizens–that significantly impacts the two segments segments actually capable of growing the economy.

This would involve a 180 degree change in the President’s attitude and that of his staff. Unfortunately, it is not going to happen in the next three years.

Posted by COindependent | Report as abusive

Mr Summers says: “Increasing growth, in addition to solving debt problems, would also raise household incomes, increase U.S. economic strength relative to other nations, help state and local governments meet their obligations and prompt investments in research and development.” But those beneficial consequences have not been borne out over the past few decades, which show stagnant or declining household incomes, for example. The stock market and the nation’s economy are not the same thing. While the nation’s governmental and legal structure is what makes it possible for the big-money operators to make their big money, it seems rare that they deliberately take the society’s interest into account, either trying to give back or to promote the long-term national interest. Devotion to short-term profit is common in those ranks and is actually parasitic on the nation, since it starves investment in education and infrastructure. Beyond a certain wealth threshold, the truly big operators may not even care about the well-being or even stability of the country, since they are by that point globally connected.

Mr. Summers seems to be talking as if we were still in the Clinton years or somewhere thereabouts.

Posted by bcrawf | Report as abusive

While a lot of people think that the Congress is dysfunctional I am one who disagrees with this statement. Congress is doing exactly what it should be doing. The country is split in what direction its future lays. The east and west coast want to go one direction and the interior states have a different vision. Until the country can agree on its future this split will remain the same. To say that the divide cannot be bridged is pure bunk as both parties have proven with presidents who were willing to sit down and find a common path.

The way forward cannot be corrected by term limits, but by true leadership that tries to see and accomodate all sides. The populace has a tendency to dig in its heels when they think they are being forced into a position they o not agree with or identify with.

Posted by rlm328 | Report as abusive

Bravo Mr Summers, thank you for helping move the focus away from the deficit idiocy and towards a correct path forward. We need large-scale, PLANNED economic initiatives to get the economy going again, FICA tax cuts, jobs programs, green technology initiatives, etc.

Hopefully the mood in Washington will start to shift this way in the months to come.

Posted by timshel | Report as abusive

@bcrawf, I should have added “public” for analy retentive folks.

A referendum (also known as a plebiscite — an outdated term in American English — or a vote on a ballot question) is a direct vote in which an entire electorate is asked to either accept or reject a particular proposal.

Posted by tmc | Report as abusive

Mr. Summers piece above – “Beyond the budget impasse” is the same article as Mr. Summers published in the FT last week which he titled “The battle over the US budget is the wrong fight”. Since the Fed position is no longer available and he missed the Noble prize for economics is he shooting to run the US Ministry of Public Enlightenment and Propaganda at the WH?

Posted by PlanetPonzi | Report as abusive

tmc, we are discussing the issue of the national referendum in the forum for months.
I don’t see how it can possibly become real without an amendment. It would be a completely new institution for the United States.
Under the circumstances, I simply don’t understand in what way anybody can “demand?”

As to Mr. Summers’ article, I fail to see anything new in the content: an application of the well-proven Keynesian tools would be helpful. No doubt.

Posted by OUTPOST2012.NET | Report as abusive

Mr. Summers, “And policies that “indirectly” address deficit issues by focusing on growth (for the banking community and multi-national corporations) are sounder in economic terms (not for WE THE PEOPLE) and more plausible in political terms than the long-run budget deals with which much of the policy community is obsessed. (I am glad the house is doing its job and focusing on WE THE PEOPLES budget.)

“Put another way, given the magnitude of forecast uncertainties (LETS JUST NARROW DOWN THOSE UNCERTANITIES BY EXPLORING WHAT THEY ARE, I KNOW, DO YOU?)there is a chance of close to 40 percent that with no new policy actions the ratio of debt-to-GDP will decline over 25 or 75 years.” (Chance, you say. I say let’s get REAL.)

Of course, debt problems could also be much worse than is now forecast. (YES IT IS.)

But in most areas policymakers avoid strong actions without statistically compelling evidence. (There is only one way to get the statistics, and that is to gather the real data. The only way to gather the data is to look at the budget in real terms, not showdown terms.) Few would favor action to curb greenhouse gas emissions without evidence establishing that substantial climate change is overwhelmingly likely. (You mean, Few would choose to look at the data that is already there, because denial is easier.)

Yet it is conventional wisdom that urgent action must be taken to cut the deficit (By looking at the budget), even as prevailing short-run deficit forecasts suggest no problems and long-run forecasts are within margins of error. (Absolutely.)

To be sure, there are steps that matter profoundly for the long run that should be priorities today. Increasing growth (which you have proven that you can not do), in addition to solving debt problems (SAA), would also raise household incomes, increase U.S. economic strength relative to other nations, help state and local governments meet their obligations and prompt investments in research and development. (Among the other shadow deals, the manufactured financial bail out crisis, ended this for most Americans.)
Beyond the fact that spurring growth has a multiplicity of benefits, (That people will do on their own as soon as the BLOCKERS of freedom like – gamblers, the world banking system, shadow economies, corruption, greedy and entitled multi-nationals get out of their way) of which reduced federal debt is only one, there is the further aspect that “growth-enhancing policies” (I call it freedom, freedom isn’t a policy, it is a inherent right) have more widely-felt benefits than measures that raise taxes or cut spending. (Really, so taxes and spending isn’t that important, you say.) Spurring growth is also an area where neither side of the political spectrum has a monopoly on good ideas. We need more public infrastructure investment (that needs to be paid for by the people who want it, and not out of pork products), but we also need to “reduce regulatory barriers” (so the casino can keep rolling) that hold back private infrastructure. We need more investments in education (and our financial institutions), but also “increases in accountability!” for those who provide it. We need more investment in the basic science behind the renewable energy technologies(the science is already there, implementation is what is needed, not talk) but in the medium term we need to take advantage of the remarkable natural gas resources that have recently become available to the U.S. (I bet Colorado enjoyed their investment.) We need to assure that government has the tools to work effectively in the information age (so we can spy on you), but also to assure that public policy promotes entrepreneurship. That is WE THE PEOPLEs JOB. Since government has not, can not and should not be in this game. The federal government’s job is to provide freedom and justice, so entrepreneurs can succeed. Now it is the federal government that interferes with the peoples abilities to function at every intersection of interaction.

If even half the energy that has been devoted over the last five years to “budget deals” were devoted instead to “growth strategies” we could enjoy sounder government finances and a restoration of the power of the American example. At a time when the majority of the U.S. thinks that the country is moving in the wrong direction, and family incomes have been stagnant, a reduction in political fighting is not enough — we have to start focusing on the issues that are actually most important. (I completely agree, and lets start with the budget of the American people.)

Posted by 2Borknot2B | Report as abusive

@OUTPOST.NET, I did not see the topic listed. I must have missed it. I’ll look again.
I realize that it will be difficult. As with the commenters o this site, they are all content to wine about a specific topic and do nothing. Never thinking of fixing the root of the issue. I hope to get enough people to raise their voices that organized groups may unfold. If the Occupy movement had solidified into one voice demanding just those two things, it may have changed the country. I agree 100% that we need the amendment, but that too will not happen with massive outcry from the public at large. Maybe if we all keep talking about it we can cause another movement without have to have a major crash/event to start it. I was impressed by the sales of “The Liberty Amendments” and bought a copy. I highly recommend it to anyone I can, but it would have been a better book if the author had stuck to the core issues and not fallen into Obama Bashing. He lost a significant amount of support in the first chapter. We must take a page from the political parties playbook. Keep on-topic, don’t fall into other topics. Stay on message. If we don’t the politicians and media will quickly pick you apart. Only one message, two items. Repeat them as often as you can.
1- Term Limits for Congress and SCOTUS
2- Campaign finance reform.

Posted by tmc | Report as abusive

I like that you’re seeking the sources of our troubles, tmc, but I’m troubled by some of your prescriptions.

Firstly, I don’t think both political parties are seriously hurting the country now. Just one, the GOP, is, and it’s really just the nihilistic part of that one that hurtles us toward nihilism. It’s been argued that this sad state of affairs can be traced to the GOP’s weakening its own ability to control its candidates and elected officials, despite their having just previously witnessed the same sort of tinkering yield self-inflicted damaged in the Democratic Party for a couple of decades. Thus, there is now evidence to suggest that we were better served when the main political parties more commonly made top-down decisions in smoke-filled rooms. Such rooms could be the last remaining places where smoking might actually be healthy.

Secodly, a referendum on term limits strikes me as problematic. Leaving aside the fact that, at the federal level, there is, thankfully, no mechanism for the sort of referenda that have made California a well funded special-interest paradise, we need only note that the nihilists in congress are all junior members to see that term limits, in addition to being paternalistically undemocratic in their implication that voters are too incompetent to remove poorly performing elected officials at the ballot box, would, by forcing the most cool, calm, collected, responsible, tested, experienced and knowledgeable officials out of office, be counterproductive.

And thirdly, as to Supreme Court Justices, if anything, the Constitution should be amended to force them to stay on the job until they are thoroughly dead by natural causes* [please note *qualifying condition, FBI et al.], cremated and their ashes scattered – preferably over the central offices of Xinhua where they won’t even notice it above the background of smog and dust storms – for the simple reason that we absolutely do not want these people thinking about any sort of career that might await them upon exiting the Supreme Court, as such thoughts would certainly affect most, if not all decisions they would make while merely visiting the Supreme Court. There is no constitutional impediment to “stacking the court,” however, so in the unlikely event that we ever had 9 intolerable Supreme Court Justices, we could just add 10 of the tolerable variety.

Finally, yes, I have little doubt that campaign finance reform would be helpful, but to be enduring, would almost certainly require a supporting amendment to the United States Constitution, and is thus years away, at best. It would nevertheless be best to start that process ASAP, and to concurrently propose two more amendments regarding federal elections. One such amendment would require that the congressional districts of each state be drawn by nonpartisan commissions, with the composition of the redistricting commissions and the districts drawn subject to review by the (till-death-do-they-part) Supreme Court, which would have explicit authority to order any corresponding revisions they see fit to end the practice of gerrymandering. The other such amendment would specifically revoke any remaining authority of each state to determine the times, places and manner of holding elections for any federal office, would transfer any such remaining authority to the United States Congress, would require that voter eligibility and other electoral practices at the federal level be uniform throughout the United States, and, to eliminate the temptation to disenfranchise voters via the overzealous application of criminal law, would specifically end the practice of disenfranchising convicted felons, including those still serving their sentences. (If anything approaching a majority of the public were ever in prison, the country would have more trouble than could be cured by disenfranchising them, so why not let prisoners vote and so strictly uphold the inviolability of the franchise?)

Good luck getting two amendments like the latter ratified, but without them, the states will continue to exercise their right to cause electoral dysfunction (ED), and they don’t got pills for that.

Posted by MoBioph | Report as abusive

PS – To give the devil its due, it was a voter referendum that reformed California’s US Congressional redistricting method to one conducted by independent commission, rather than by the state legislature, as had been the case previously. “The times, places and manner of holding elections for Senators and Representatives, shall be prescribed in each state by the legislature thereof,” says Section 4 of Article I of the US Constitution, however, and a referendum passed by voters is always at risk of court challenges, so an amendment to the US Constitution would more durable, as well as being broader by virtue of applying nationwide.

Posted by MoBioph | Report as abusive

Did like the brevity of the article compared to past long articles from Larry.

“..debt-to-GDP ratio will be below its current level of 75 percent..”

75%?

Where did this figure come from? The current figure is more like: 106% (usdebtclock.org)

Growth – it is a nice dream.

The reality is more like – debt impairs to the extent your bare-survival with no chance for growth.

Posted by Mott | Report as abusive

Thanks @MoBioph, points well taken. Unfortunately, the chances of either a national referendum or a constitutional amendment are slim at best. I am not a proponent of holding public votes in general, only in this specific instance. Indeed you are correct that term limits nor campaign finance reform would last long without the amendments. But to get the amendments takes a long time and political will to do so. You would only get that if we had the referendum that virtually immediately eliminates the powerbases of congress and install people that would quickly push thru the amendments to cement the deal. At least that’s how the dream goes. I will admit I could be swayed on SCOTUS. You present a good case there. Perhaps an age limit? say 75? We now have four and even five generations alive and kicking at one time now. I’m not sure having 95 year olds running things is the right thing. We could leave that to a new congress too actually.
I hope that when the next crash occurs, for whatever reason, that the next “movement” will move in this direction. We should all start planting seeds now for that day.

Posted by tmc | Report as abusive

Why is volcanic soil so fertile?..

Posted by UauS | Report as abusive

Mr. Summers, like most, ignores the elephant in the room! The personal computer has already forever transformed the present AND future of American society.

Good American “opportunities” that could lead to something better such as draftsmen, girls Friday, secretaries, administrative assistants, clerks of every sort (inventory, warehouse, bookkeeping), lower-level management and coordinators have all but disappeared. Many remaining are endangered. They weren’t offshored, they’re just gone. Forever!

“Jobs”, positions which may become progressively complex and well paid one took for the long term, perhaps for life, are but a memory of older workers. The old reciprocal commitments between employer and employee are no more. Only a “need” for something to be done survives. Such needs are ever being simplified.

Anyone warm and breathing that can pass a drug test, no felony convictions, does not weigh 300 lbs., and has Junior High English and math capabilities can be 100% productive in two weeks of “on-the-job training has a chance. Others can apply, but waste their time in doing so. Our society has no productive place for them.

The new positions are easily be filled with part-time people (no holidays, sick days, family leave days, health insurance, continuing education, bonuses or pensions necessary). Human light bulbs, one fails, another plugged in. Don’t even have to learn their names.

As human knowledge leaps forward ever faster, research is ever more automated requiring fewer and fewer humans involved in the exanding proocess. Many existing “cottage industries” that currently supply domestic auto makers, aircraft manufacturers, etc. with component parts will eventually be replaced by 3-D printing systems. Their employees will be “on the street”. Over time, there will be better and better people “on the street” ever more desparate to be productively employed and fewer and fewer “needs” for them.

As cheap natural gas replaces coal generating electricity, etc. associated “lost employment opportunity” threatens the very economic viability of large areas of multiple states, sacrificed on the alter of “the environment”. Our educational system everywhere is failing to prepare young Americans to fill society’s needs.

Philosophical generalists are today flipping burgers with crushing academic debt. We need a “public” system that produces citizens adequately prepared to meet both civilian and military “needs”. One in three high school graduates do not meet the standards of our volunteer military. Such system MUST also retrain citizens AS NECESSARY when contemporary “needs” change.

Today it is primarily America’s government, government programs, and idle socio-economic underclass whose “growth” consistently outpace productivity in an economy that is NOT growing. No one’s crystal ball is clear

The parables are: “When you’re in a hole, stop digging”. “When you’re on the wrong road, STOP!” If you’re losing money, you can’t make it up in volume! One definition of insanity is doing the same things over and over and expecting different results.

Posted by OneOfTheSheep | Report as abusive

The Republican Party is tearing itself apart. They have alienated major portions of the electorate, e.g. women and Spanish speakers.

The Democratic Party will win back control of Congress and keep the White House. Then the country can start to move forward again.

Meanwhile, I fear the extremist elements on the right will turn violent.

Posted by johnzbesko | Report as abusive

OneOfTheSheep is unfortunately on the right mental track.

The biggest elephant in the room is the fact that while our population continues to grow, our need for workers is declining. From robots on the assembly line, ATMs in banks, checkout clerks in groceries, etc etc…. we have too many people wanting jobs and not enough people willing to pay higher prices to support them.

“Re-education” presumes that people were properly educated to begin with. But with the public unwilling to pay taxes to support the education system needed to educate themselves and their offspring for the work of today (let alone the future), it’s hardly surprising our graduates are unsuited to be employed, even as grunts in the military.

We are the ones who decide to have too many children so we can feel loved & have our DNA spread into the future. We are the ones who decide we’d rather keep our money than invest it in the future by properly educating our youth. We are the ones who decide we need more and more cheap things. We are the ones who decide to elect government representatives to “fight” for us.

We are ALL ‘one of the sheep’. And we only have ourselves to blame for it.

Posted by euro-yank | Report as abusive

The problem with downplaying the debt based upon the debt-to-GDP ratio is that it isn’t the “GDP” that will have to repay the debt. It’s the American people. A more proper measure of the seriousness of the debt problem is a comparison of the debt to our ability to pay – the debt-to-household net worth ratio. By that measure, the debt is escalating exponentially.

GDP is more a measure of how much we spend collectively. In the private sector, where money really matters, decisions to grant loans are based not on how much we spend but on our ability to repay the debt – our incomes and our net worth. For most Americans, incomes and net worth are in decline.

Posted by Pete_Murphy | Report as abusive

To get back on-topic, growth based economics should be retired for the USCA and for several reasons. Initially and primarily globalization. Growth is not happening here and will not for a long time if ever again. It is happening in the developing natation’s including China. This can not be stopped or controlled. It is the evolution of our species. In business terms out markets though great, are saturated. Nothing is going to change that. We can’t fix it with immigration unless we allow half a billion Indians to move in, or adopt 160 million Mexicans as the 51st state. Second reason is as @OOTS states. Automation. Though half of his posts show the problem with that too. He often rants on the “lazy do nothings”. That is from generational/social training. We have always taught ourselves that we ALL must work. Well, that’s just not true anymore. In the USCA and the EU, we don’t need everyone to work. That is going to increase exponentially in the next two decades. We know have robotics that can mimic a common man. You can try to ignore it, call it “star-trek economics” or whatever, but you do so at our peril. We now have a nuclear powered, laser armed rover on Mars for gods sake. Do you think we don’t have those kind of weapons? Public technology is around twenty years old. The star-trek economy MUST be planned for NOW. We already have robots that can do anything a man with a 100 IQ can do. Mass production to follow soon. As @euro-yank above states, you can not re-train the average person to be a high tech worker no matter how hard you try. So what do we do when 40-50% of the population is not required to work? That’s going to be in just two or three short decades for the USCA! As Morgan Freeman says in his new movie, I’ve got hemorrhoids that are 32. My son will only be 36! So what do we do?
We will obviously need very good government operated/controlled social programs. Yeah, I hate the thought too from my social training of the 70′s that welfare states are evil, but we have no alternative. We need to move away from a weak government/strong growth based market economy to a strong government/ social based economy. We need to retrain our society to want intellectual self-improvement, not physical material gains. We will also need to, as @Pete_Murphy always points out and the Chinese have proven, manage our population. If not, @OOTS ranting of the Blue to Brown marble will occur. Especially if we have several billion average intelligence people with basically nothing to do but change batteries in their droids and devices. But I’m sure Wally-World will have a “bot for that” too.
We need to stop ranting about symptoms and address the big picture.

Posted by tmc | Report as abusive

In support of my ranting above: We know that nothing is publically stated from the Chinese without their government approval: http://www.businessweek.com/articles/201 3-10-14/chinas-state-press-calls-for-bui lding-a-de-americanized-world

We ignore this at our own peril.

Posted by tmc | Report as abusive

Apparently, the “unconditional income” is inevitable.
It’s a popular slogan in all Pirates’ parties.

What is the economy? It is economic activity within the society. If all supply is delivered by 50% of the members, it is quite natural that another 50% not involved in economic activity are supposed to be paid a rent. Not much – but enough to live a normal life.

Another effect we expect: a dramatic re-distribution of income. Who said that a teacher, or social worker, or firefighter contribute to the society less than an executive of a hedge fund?

Gradually, we may drift away from private equity entirely. The cooperative is a good form of economic activity.

To make an individual interested, the difference in consumption can be 2x or 3x. Not 1,000% or 10,000%

And this might be an entrance into The Star Trek economy.

Posted by OUTPOST2012.NET | Report as abusive

What has been slowly destroying our political system, our government and our economy has been the replacement in the GOP of a large portion of moderate republicans by the Tea Party. The Tea Party believes in “my way or the highway,” destructive, obstructionist politics. They are willing to destroy our economy and our government so they can then say “see, I told you that our federal government does not work.” They thought that they could repeal Obamacare — give me a break, assuming they could get such legislation through a democratic senate, they do not have 2/3 vote in the House to overcome a presidential veto — they are not very bright. And now they think that closing the federal government and taking the economy to the brink (or maybe god forbid over the brink) is fiscally responsible. The American people are brighter than that. The shutdown is costing our economy $1B a week, and the cost of a lower credit rating due to this irresponsible fiscal/governance craziness will cost our economy hundreds of billions. (This money could have been spent, for example, on repairing and upgrading out infrastructure, making our businesses more efficient and the U.S. more attractive to investment, as well as making our country safer, e.g., fewer collapsing bridges.) Time for the moderate Republicans, business interests and the American people to rid our country of this Tea Party cancer.

Posted by Leftcoastrocky | Report as abusive

Thanks for the civil exchange, tmc, and good luck, as I fear an unfolding accident may be rendering thoughts of electoral reform moot. Every country has people intent on destroying it, but their chances of achieving their goals would usually be pretty low, were it not for accidents caused by unintentional sources of self-destruction.

It’s perhaps a bit unkind now to belatedly point out that one of America’s unintentional sources of self-destruction was the policy of subjecting its sovereign debt to a ceiling placed under the control of potentially adversarial groups of politicians in the form of the two houses of the legislative branch and the chief of the executive branch. On the bright side, we can be thankful that we at least left the judicial branch out of that one, though there’s still time for them to try to weigh in somehow if they act fast.

During WWII and the Cold War, the United States government took a real interest in contingency planning, so they must have developed plans to secure the country’s nuclear arsenal and other hazards in case of various emergencies, including a collapse of the government that commissioned the contingency planning. I hope those plans have been kept current.

Posted by MoBioph | Report as abusive

@tmc – I have to say, your most recent post (“Back on topic”)is perhaps the most pertinent and salient that I’ve ever seen on these boards – are you by any chance a sci-fi writer? (Meant as a compliment)

Finally someone articulates the simple truth – things are NOT what they were, never will be again, and no amount of foot-stamping, breath-holding, or debt-ceiling-blocking is ever going to change that. The world we live in has changed radically in our lifetimes – makes Grandpa seeing cars and the television appear look like staring at a white wall. Their generation may have seen geometric change – we’re now looking at exponential change. And barring a “global killer” event, that genie is NOT going back into the bottle.

I hope somebody somewhere has the vision to see what lies over the horizon – certainly I do not. But all of the commonly accepted “isms” are rapidly approaching extinction – that new vision, where ever it may lie, will be our only real hope.

A new reality has arrived, the paint on it is so wet that we’re not even sure what it is yet – but we’re going to have to learn, fast.

I hold this hope – man is the most adaptable animal to ever rise from the muck, we’re tough to kill and have shown ourselves capable of rolling with the punches. Sometimes we have to be dragged to it kicking and screaming, but somehow we’ve endured the sweep of history so far. Do we have what it takes now…?

Posted by TheWhiteLine | Report as abusive

@OUTPOST2012.NET,

Rational thoughts all, EXCEPT: “…it is quite natural that another 50% not involved in economic activity are supposed to be paid a rent. Not much – but enough to live a normal life.”

Intelligent societies are taking the first, tentative steps toward creating necessary incentives, both economic and social, to slow the rate at which human activity is destroying the planet that gave us birth (and wasting finite resources). At SEVEN BILLION and climbing there are TOO MANY HUMANS already on this earth!

Nature’s historical methods of population control are famine, pestilence and war. While effective as a “last resort”, these lack the “sensitivity” increasingly desired by “civilization. Accordingly, it will be for “the civilized” to define and adopt necessary incentives and penalties to insure that ALL cultures survive to live together in peace. Recorded history offers NO progress towards that in thousands of years.

This would inevitably require discouraging the disproportionate and unrestrained propagation by those currently unable to feed, educate or productively employ even their current number. A concurrent priority, by no means exclusive or incompatible, would be to reduce the number in and percentage of those “…not involved in economic activity…” from 50% to perhaps 5% of a population stabilized in number (until or unless man successfully manages to establish self-supporting colonies on other planets or in space).

When children have unrealistic expectations, it is for parents, schools, society and related commerce to step in such that a sustainable civil society is the predictable result. Similarly, for some cultures a “new normal” in family size is necessary. Everyone does NOT have the right to as many children as they can “make”, and the current irresponsibility of such cultures (and religions) must change for the common good.

Only then is it possible to reduce the population of humans to such number as our planet can sustain indefinitely. This should be possible by (1) limiting “unnecessary” births, and (2) through “end of life” attrition (not replacing all who “pass of natural causes” at the end of their time on earth).

Yes, the devil is in the details. The “number” Earth can sustain is hugely different between “minimum sustenance” (large number of mouths) and “maximum achievement” (much lower number of well-fed, healthy mouths). Achieving necessary consensus will be “interesting”. Muslims and Catholics must abandon their existing strategy of “burying” every other society over time with their progeny.

The penalty for not doing anything is simply not negotiable. Mankind WILL either destroy itself, drowning in it’s own pollution, or mimics “Soylent Green” (song in background…”People…who need people…”).

Posted by OneOfTheSheep | Report as abusive

Since the actions of the House’s Tea party goes against most peoples idea of how majority rule works and against section 4 and 5 of the Fourteenth Amendment. They will remembered for that and upset to investments.

Section 4 of the 14th says all lawful debt will be paid. Section 5 says Congress will make provisions for paying. All laws and actions preventing that is therefore unconstitutional.

Hopefully the courts and vorters and people who may make political contributions when upset enough will remember that.

Posted by Samrch | Report as abusive

OOTS,

I was actually talking about OECD nations. The theme is too vast in its scale to embrace the whole world.
The factor of population/birth rate makes even thinking, or very light “drafting,” hardly possible.

According to the Star Trek, the Vulkans are supposed to arrive in exactly 50 years. It could make a change!

Posted by OUTPOST2012.NET | Report as abusive

@OUTPOST2012.NET,

Science fiction writers have correctly foreseen many facets of possible futures. Our cell phones are very much like Star Trek’s “communicators” for one example, and so such projections have been useful as a candle to suggest directions for research. This is credible.

On the other hand, Science fiction writers have been no more successful in forecasting the future than other writers. Speculations as to the existence of Vulcans, or their date of arrival on earth in any future only introduces distraction and pollution to honest advocacy and/or debate.

Quite frankly I have serious doubts that mankind will still exist in fifty years, at least in current form. We seem to be the seed of our own destruction.

Posted by OneOfTheSheep | Report as abusive

Didn’t one of the religions predict like 144,000 will survive? Sounds about right for a really bad super-bug. So @OOTS, we may be our own destruction, but I don’t think mankind will be extinguished by mankind just yet. In ten or twenty years maybe, but not quite yet.

Posted by tmc | Report as abusive

We’re starting to digress. Probably a good time for Reuters to cycle this one out and let a real author have a chance.

Posted by tmc | Report as abusive

C’mon guyz! We may have big troubles ahead. But it is hardly so “doom and gloom.” I have read another day that nuclear fusion had a good progress. Maybe another revolution in the science is coming.

As to “Star Trek” in application to social and economic stuff, it is just a good and associative term to talk about the future. In a positive light. To spell out some bold and even weird ideas. TMC, we know we are doing this at the forum. It’s a great “bridging” between completely different people.

In fact, all ST series, movies and books are very vague about how it is supposed to work.

Posted by OUTPOST2012.NET | Report as abusive

“euroyank,

Your nom de plume is consistent with your views:

“…we have too many people wanting jobs and not enough people willing to pay higher prices to support them.” So back when automobiles replaced horses Europeans, who never saw a government subsidy they didn’t like, would have subsidized those who had previously made buggy whips for the rest of their lives.

“…with the public unwilling to pay taxes to support the education system needed to educate themselves and their offspring for the work of today (let alone the future), it’s hardly surprising our graduates are unsuited to be employed, even as grunts in the military.” Hello?

American property taxes and school bond elections plow more and more into an “educational industry” now unionized to the point that it is OVERFINANCED, arguably dysfunctional, unaccountable and resistant to meaningful change. But you and I have polar opposite opinions as to the merit and proper function of unions.

In America, yes, “we are the ones who decide we’d rather keep our money” than throw good after bad down the same old rat hole. We invest more than should be necessary to “properly” educate our youth. When we see that wasted, the answer isn’t MORE MONEY. It is proper priorities, reasonable expectations and genuine accountability.

You see, here in America, the big difference is that we view our earnings as OURS first and then we allow government enough to do their part. Europeans seem conditioned to view individual earnings as first subject to the government’s “needs” and they make do with what is left.

That’s why Europeans are always seeking more and more benefits for fewer and fewer “on the job” hours, more and more and time off for “family leave, vacations, etc., all of which work AGAINST the productivity of their political system. Americans, who willingly work more hours, more days, longer shifts for more money with relatively few benefits and vacation days or traditional pensions seem to have the necessary “carrot” to invest of ourselves such that OUR productivity is ALWAYS markedly superior to yours.

If “We are the ones who decide we need more and more cheap things…”, that a decision that is for us and us alone.

Posted by OneOfTheSheep | Report as abusive

#OOTS – I’m very very late in replying… but I’m sure you’ll check back. If I’m right – let me confess:

I grew up in America… So, believe me, I get your cultural mindset. That’s not to say that I think it is perfect.

I live in Europe…. And believe me, I get the cultural defecit. That’s not to say it’s a loss.

I also realize that “the world” has been trying to find a middle ground that allows both to be rich. And I realize that it’s not easy.

So, shall we try to try to find the best of both worlds, or is it better pretend that that they are mutually exclusive?

Posted by euro-yank | Report as abusive

ps…… I’m curious as hell…… what do you mean to share with the world with your anonymous “nom de plum”?

Posted by euro-yank | Report as abusive