A Looming Deficit Disaster

Published Jul 19, 2012. In The Daily Inter Lake.

The federal government’s dire fiscal condition really should transcend politics and party alignments, and for most everyday people it does.

But in the most unfortunate ways, solutions get lost in translation in Washington, D.C., largely because of powerful special interests that fiercely resist reforms. That has been the experience of the Concord Coalition, a national non-partisan group that is dedicated to the noble cause of fighting for “generationally responsible fiscal policy.”

Currently, the country has completely irresponsible fiscal policy that will fall on the backs of future generations. The national debt of more than $15 trillion is the highest debt in world history.

For several years, the federal government has been spending $1 trillion more annually than it collects in revenue. The country is exporting about $2 billion in interest payments to other countries every week, and that alone should be sobering. When you consider that among the countries gaining a stranglehold on the U.S. economy by buying our debt are China (in a big way) and Iran (in a smaller way), you should be very afraid.

To say the overall situation is unsustainable is a monumental understatement, and it should have the attention of every American. Paul Hansen, the western regional director for Concord, told the Inter Lake editorial board recently that when he conducts exercises with people of varying political views, 99 percent of the time they can find ways to achieve a 10-year, $4 trillion deficit reduction target.

Obviously, many of the solutions would be painful, and that’s why recommendations from the Simpson-Bowles Commission — solutions favored by Concord — have failed to get traction in Washington. Last year, the House voted on a Simpson-Bowles bill and it failed 382-38.

That’s because it gores everybody’s ox to some degree, and lobbyists make sure lawmakers know it. The time is coming, however, when political courage will be necessary and bitter pills will have to be swallowed.

We firmly believe that Washington has a spending problem, not a revenue problem, but those at Concord believe compromise will be vital to addressing the problem, and new revenue needs to be part of the solution. To bring in additional revenue, the group favors tax code reform rather than tax increases.

And that brings us to the current stalemate over taxes in Washington. Why Democrats want to raise taxes on anybody is beyond us because of the adverse affect it would have on an already anemic economy. But there are politics at play in a big way during an election year, making it highly unlikely that any serious-minded efforts to fix the federal government’s fiscal situation will happen before the election.

There is urgency, however, and if the day of fiscal responsibility doesn’t come soon, the day of reckoning cannot be held off much longer.