September 18, 2014

Posts on national debt

Subscribe to this feed Subscribe to this feed

 

Tuesday, February 26, 2013 - 10:22 AM

In his State of the Union Address President Obama declared: “Our government shouldn’t make promises we cannot keep, but we must keep the promises we’ve already made.”

It was good applause line, but it glossed over a key point: The promises we’ve already made are the ones we cannot keep.

It is widely accepted that current fiscal policy is unsustainable. By definition, that means something has to change. Yet, if we decide that all promises must be kept, we can’t change anything without “breaking a promise.”

The dilemma for policymakers in Washington is that for years they have made unfunded promises and there is no politically convenient way to reverse this.

The first thing to do is just face up to it.

That’s why a bipartisan group of former members of Congress included this warning among their findings from their Strengthening of America forum series last fall: “We cannot put our debt on a sustainable path without reductions in the projected cost of entitlement programs, cuts in discretionary spending and higher revenues.”

Strictly speaking, any of those things could be characterized as breaking a promise.

It could be argued, for example, that...

Friday, February 22, 2013 - 1:50 PM

Over many years of grassroots outreach, The Concord Coalition has learned to count on the passion and creativity of its members. Those of us who spend time traveling the country know that Washington doesn't have a monopoly on good ideas -- that often the public is ahead of the politicians in recognizing the need for action and cooperation on important public policies. That is why we are happy to announce that our friends at the Peter G. Peterson Foundation have launched a new grassroots competition called "I'm Ready."

The foundation is soliciting videos from people across the country, in which they tell Washington why fixing the national debt is so critically important to our future. The two best videos - as determined by views, public votes, and review by a panel of experts - are eligible for a $500 prize. 

These videos will bring together a range of voices to show that wherever you go, Americans understand the importance of...

Monday, January 28, 2013 - 9:36 PM

The Concord Coalition, which has long viewed public engagement as essential to U.S. fiscal reform, is partnering with the Campaign to Fix the Debt to present  a series of public forums around the country in the coming weeks.

This joint project will focus its efforts on ten programs in six states: Colorado, New Hampshire, Iowa, Wisconsin, Florida and Tennessee. These events,  open to the public, will take a variety of forms.

We at Concord are delighted to be involved in a project that we believe can help lay the groundwork for comprehensive fiscal reform in the near future. The Campaign to Fix the Debt, which was launched last year, has been working with business leaders, political figures and hundreds of thousands of citizens from across the ideological spectrum who want to see elected officials step up to solve the nation’s fiscal challenges. The impact is being felt in Washington already.

The speakers at the upcoming events will include both national and regional experts on the rapid growth of the federal debt and related issues, including the need for fundamental reforms of the tax system and entitlement programs. There will also be an emphasis on the need to curb future increases in health care costs. Some of the speakers hold either...

Friday, January 18, 2013 - 2:32 PM

In his press conference this week, President Obama suggested that policymakers only need to pass another $1.5 trillion worth of deficit reduction, on top of the $2.5 trillion already enacted, to stabilize the growth of the nation’s debt and, in his words, “finish the job.”

The Center on Budget and Policy Priorities and The Committee for a Responsible Federal Budget, two well-respected fiscal policy organizations, basically agree with the President’s math, and there is nothing to quibble about in those calculations regarding stabilizing the debt.

However, that level of deficit reduction would hardly mean the “job is finished.” In fact, the whole idea that we can pinpoint a specific amount of deficit reduction necessary within a 10-year time frame can be a distraction from the fiscal sustainability conversation we need to have.

Getting caught up in exactly when the debt-GDP-ratio stabilizes, or whether we might miss that goal by a few percentage points at the end of the 10-year window, assumes a precision in economic and technical estimating that no entity actually possesses (even the CBO, whose respect and skill in these matters is second-to-none).

Our main emphasis...

Monday, January 7, 2013 - 12:00 PM

On his way out the door, retiring Senate Budget Committee Chairman Kent Conrad (D-N.D.) had a lot to say. It was a final reminder -- he called it a challenge -- from one of the Senate’s foremost deficit hawks of why deficits matter and why much more must be done to do bring them under control.

Conrad voted for the fiscal cliff deal in the early hours of Jan. 1, but he explained that he did so only because going over the cliff would risk a recession and higher unemployment. Moreover, 2 million people already out of work would have lost unemployment benefits.

And yet, Conrad said, “I hate this agreement. I hate it with every fiber of my being because this is not the grand bargain I had hoped and worked for and believe is so necessary to the future of the country.”

While Conrad and many others, including The Concord Coalition, had pushed for a deal that would start the nation down the road to a more sustainable fiscal future, the end result was “not, by any standard, a deficit reduction plan,” he said. “As necessary as it is, no...

Tuesday, January 1, 2013 - 3:46 AM

Once again we have a political punt.

With no time left on the clock, Senate Democrats and Republicans have approved a deal to avoid the most immediate consequences of the so-called “fiscal cliff.” The defining feature of the deal, however, is that it leaves much more to be done.

The deal -- which the House must still vote on -- requires no hard choices and solves no difficult problems.  

There is no entitlement reform, no tax reform and no framework or process for addressing these critical needs in 2013. Meanwhile, the indiscriminate and disproportionate discretionary spending cuts mandated by last year’s Budget Control Act are postponed, creating a new cliff.

And with no increase in the statutory debt limit, it still looms as the next self-imposed crisis to remind everyone of how dysfunctional the legislative process has become on Capitol Hill.

So we have a deal, but not a grand bargain. The best that can be said for it is that it smoothes out a portion of the cliff. That will benefit the economy in the very near term, but aside from some relatively minor tax increases on the highest of income earners, the net result of the fiscal cliff deal is to preserve an unsustainable status quo. 

The unfinished business has not gone away. It has simply been handed off to the new...

Monday, November 12, 2012 - 1:00 AM

Example isn’t the main thing in influencing others – it is the only thing. – Albert Schweitzer

Increasingly alarmed by the nation’s deteriorating fiscal outlook and the failure of our political system to produce timely, common sense solutions, some state officials have begun to show leadership. They can do much more.

This year, the United States Conference of Mayors and the two leading associations of state legislators issued compelling resolutions that urge action by their federal counterparts. 

In September the mayors called for “a bipartisan and balanced approach to deficit reduction by incorporating spending cuts with additional revenue from sources such as tax code reform and closing unfair corporate tax loopholes.” In October the mayors reiterated their call for “a balanced plan for recovery that has the potential to restore the confidence of our people, and the world, in the leadership of our national government.”

The bipartisan Council of State Governments-West unanimously passed a resolution at its annual meeting in July urging Congress “...

Wednesday, November 7, 2012 - 11:01 AM

Congratulations to the Election Day winners. So what do Tuesday's results mean for the fiscal outlook?

Think of it this way.

If the country is on an unsustainable fiscal path, which it is, and if continued partisan bickering will not solve this problem, which it won’t, and if divided government has been re-elected, which it has, then the only choices are calamity or compromise.

The Concord Coalition urges compromise.

That must begin immediately as the two parties negotiate a responsible alternative to the “fiscal cliff” – a combination of tax increases and spending cuts that will hit with such suddenness that it could throw the still-fragile economy back into recession.

But they can’t just kick the can down the road -- again. The year-end fiscal cliff is bad, but eventually we will need the longer-term deficit reduction produced by the policies comprising the fiscal cliff. It just needs to be phased-in in a more rational way, as proposed by the bipartisan Simpson-Bowles and Domenici-Rivlin recommendations.

The key is to agree on a process for dealing with the serious and structural imbalance between spending and taxes that, if left on autopilot, will damage the economy, stress the social safety net, diminish our world leadership and leave future generations saddled with a debt burden...

Wednesday, October 31, 2012 - 9:32 AM

This is Part II of a two-part series of posts on the presidential candidates' fiscal policies. Part I examines Governor Romney's plans.

The first part of this blog post series looked at the unanswered questions in Governor Romney’s overall fiscal policy, tax reform plans and health care reform plans. This second part will look at President Obama’s budget plans in addition to some areas of uncertainty.

Simply by virtue of being the President, with the requirement to submit an annual budget, Obama has had to provide more details about his fiscal plans. Yet, what those details clearly show is an inadequate long-term fiscal goal. Over ten years, federal debt held by the public would only stabilize temporarily, and at a higher level than it is today.

To the President’s credit, he supports negotiating a long-term, bipartisan “grand bargain” on fiscal issues with both spending cuts and new revenues. Yet, such explicit support has come only after his initial tepid reaction to the Simpson-Bowles report when it was released. Nevertheless, if Obama is re-elected, the upcoming...

Wednesday, October 31, 2012 - 9:31 AM

This is Part I of a two-part series of posts on the presidential candidates' fiscal policies. Part II examines President Obama's plans.

As election day approaches, it is appropriate to look at what we know and what we don’t know about the two candidates’ fiscal policy proposals -- especially since it is unlikely we will get any more details prior to election day.

In many respects, the crucial differences between the two candidates are defined by their fiscal policies, and it is almost certain that the winning candidate’s fiscal policy choices will be as immediately consequential as any president’s in history.

In this blog post, I will review Governor Romney’s proposals and in Part II, I will cover the President’s proposals looking at three key areas: The overall budget goal, tax policy and health care.

It is difficult to overstate how little we know about where Governor Romney’s policies will lead. The basic problem is that he has...