By Michael Kinsey, The Atlantic, October, 2010
Numbers are numbing, and I’m trying to avoid them. But pick a document at random from the pile. Here’s one: the latest annual “Long-Term Budget Outlook” of the Congressional Budget Office, published in June. The future is especially hard to predict at this moment, because current law includes several things that are unlikely to happen, such as the expiration of the George W. Bush tax cuts, and major unspecified cuts in defense and other spending programs. But making reasonable assumptions about these matters, the CBO projects that the national debt—nearly 62 percent of GDP—will rise to 87 percent of GDP by 2020 (a decade away), 109 percent (its previous peak, during World War II) by 2025, and 185 percent by 2035. “After that, the growing imbalance between revenues and noninterest spending, combined with spiraling interest payments, would swiftly push debt to unsustainable levels.”
The CBO says that these estimates “understate the severity of the long-term budget problem because they do not incorporate the significant negative effects that accumulating substantial amounts of additional federal debt would have on the economy.” To wit: higher interest rates, more borrowing from abroad, less domestic investment, lower incomes, and an increasing chance of a true crisis if markets lose faith in the U.S. government’s ability to pay off its obligations.
There are a dozen ways to look at the national debt and the annual government deficit, and they all lead to varying degrees of panic. What’s especially scary about our fiscal situation is that everybody knows the facts and concedes the implication, but nobody is doing anything about it (except for grinding out books and reports and long articles in magazines like The Atlantic, complaining that everybody knows about it but nobody is doing anything about it).
And the national debt is just a fraction of the problem. State and local governments, unlike the national government in Washington, cannot print money, and many states have constitutions that forbid them to run a deficit. Nevertheless, they will be losing, together, about $140 billion this year. They’ll make up the money by “disinvesting”: firing teachers, putting off maintenance on public buildings, shutting libraries. We’ve been delaying maintenance on our public infrastructure of highways and schools and, yes, airports since at least the 1980s, and the shabbiness is really starting to show. Delaying maintenance is like borrowing against the future. Debt is everywhere you look. Here’s a short inside piece in The New York Times Magazine about state and local unfunded pension obligations for retired employees. They add up to between $1 trillion and $3 trillion. Until that article, I had given no thought whatsoever to shortfalls in state employee pension funds.
The dimensions of this problem, although numerically stated by Kinsey, are nearly incomprehensible.
And the fact that no political initiative seems to be able to mount a credible and sustainable energy, crossing party and ideological divides, to address it appalls us all.
The White House says it is very conscious of the situation, and seeks to change the direction of the curve. The Democrats, however, in both houses of Congress, seem unable to attract a single Republican to the cause, especially since the party of Lincoln and Eisenhower has bowed out of proferring ideas and co-operation in order to provide statemanship and leadership on this burden for the foreseeable future.
And the burden is not restricted to the generations of Americans coming over the next half century. It also applies to Canadian generations.
Our two countries are so inter-dependent in trade, in geopolitical issues, in cultural images and in comparisons, as Canada seeks to carve out some identity different from our neighbours, like Health Care and "peace-keeping" and "honest broker" and "battle of the blades" and "hockey" and we hope, schools and hospitals that still work.
Fiscal responsibility does not have either a Democrat or a Republican pedigree. Fiscal responsibility is an issue through which all other issues have to be seen. Fiscal responsibility seems to have been thrown out the window after 9-11, because "the world is going to here from us" after this, as Dubya put it standing on the rubble at ground zero.
Complications for debt and deficit continue with the Afghan "surge" in spite of the draw-down date of July 2011. Also, this, like the economic collapse of 2008, is not an issue that can be fixed in a nanosecond, in the manner to which Americans have become accustomed, or they lose interest. It will take long-term planning, and long-term discipline, and long-term co-operation, and long-term vision and these are traits the U.S. seems more able to deliver to other countries than at home.
The power of pop culture, of a Tea Party filled with people whose lives, for the most part, have not been dedicated to long-term goals and solutions, but rather to daily issues like jobs, and domestic responsibilities, a media addicted to simple identifiable conflicts of personalities from a dual perspective (hero or goat), outside pressures like trying to bring peace to the middle East, and keeping the North Korean regime off balance, and preventing Iran from acquiring nuclear weapons, and the occasional preventable health scare, because regulations and the regulators to enforce them were cut from the budget....and the mix plays havoc with the most sane of minds and characters.
While the possibilities for change have so many windows of opportunity (given the huge number of critically ill issues), and that makes for epic efforts on the part of a few (like Obama), the majority of legislators and ordinary people are, naturally overwhelmed, and burying heads in proverbial sand seems like a sane approach.
I worked for an chief executive once who would often comment, "Many problems, if left to their own development curve, will eventually resolve themselves, without exceptional intervention."
Two first nations people, talking will usually take a common perspective on the horizon without making direct eye contact, keeping in mind their short existence, in the long reach of eternity.
We can only hope that both the executive and the first nations' perspective will be useful in the long-term struggles with our need for military solutions, for instant answers, for our refusal to join national causes, for our internal divisions (like St. Paul: The things I would not do, I do, and the things I would do, I do not do.)
and the appalling cancer that now infects so many countries, including the U.S., in terms of fiscal stability, will be resolved by a combination of new approaches at home and new concensus among nations.
Maybe, just maybe, war will finally become "too costly" as it has always been, and we will be forced to accept that reality. And maybe child deaths through preventable disease and lack of water and adequate nutrition will no longer be tolerable to our eyes. And maybe, our empty bank accounts will force us into the kind of collaboration that can only be built on top of universal scarcity, rather than the imbalance of plenty for some and nothing for many.
And maybe, just maybe, we will finally see every human being as worthy of a decent, honourable and productive existence, and remove our worship of the rich and the mighty. And maybe we will finally hear Pogo who reminded us, "We have met the enemy and he is us!"