Over the next several days, we will be discussing the looming fiscal cliff from numerous political perspectives. The discussion will revolve around fiscal problems our nation faces and more importantly the solutions. We will kick off the conversation with Political Insiders Report, Editor in Chief, Chris Scott. Chris Scott was on the Crash Davis show on 1100 KFAB this week discussing an Op-Ed he wrote about our financial woes and some of the tough decisions that need to be made. That interview can be heard by clicking here. Below is a copy of the Op-Ed written by Christopher Scott.
The Time for Political Compromise is Now
There is an old saying in sales that when it comes to customer expectations, one should always under promise and over deliver. By doing so, the customer is likely to be pleased with the outcome. Unfortunately, when it comes to the Federal Government and by extension our elected officials, they have done exactly the opposite by over promising and under delivering on decades of commitments to the voters.
Both political parties are doing everything they can not to meaningfully address the many serious financial problems that our country will face in the next few months. Our financial problems are not a byproduct of an unforeseeable event. Our financial problems are result of a decades worth of bad policies and over promises made by overzealous politicians that are committed to preservation of their own political status over real solutions.
With the fiscal cliff looming, sequestration of spending on the horizon, another round of quantitative easing becoming a possibility, and the potential of another debt ceiling increase soon, now more than ever politicians need to reach across the political aisle and show some political courage to face these problems head-on with a compromise-based agenda in mind.
The Democrats tell us the upper income earners or the 1% need to pay a little bit more. The Democrats demagogue the 1% and say that they need to pay their “fair share.” The reality of this argument is that it is not based in fact and does nothing to move the conversation towards compromise. Americans have the world’s highest corporate tax rates and some of the world’s highest personal income tax rate. Those are facts. Many Republicans respond that if in fact everyone needs to pay their fair share, just what does the fair share of the over 40% of Americans who pay no income look like? The time for pre-election hyperbole is over. This is going to have to be a shared sacrifice approach and not one borne by the nation’s wealthiest.
The Republicans are delusional to think that they can reach an agreement without taking a balanced approach by increasing revenue and decreasing spending. Republicans may be ideologically correct that many of the problems we face are spending problems versus revenue problems. Unfortunately, Republicans must focus on the facts. Based on the current Republican numbers in the House and Senate, there is no possibility of a decrease in spending only bill ever seeing the light of day on the President’s desk. If the Republicans are adamant about getting a deficit reduction bill passed, revenue will be on the table. Blaming President Obama solely about running up the nation’s credit card is intellectual dishonesty as former President George W. Bush shares much of the fault as well.
Here are the facts. The United States borrows nearly 41 cents of every dollar that we spend and we have a federal deficit that is rapidly heading towards 17 trillion dollars. Unfortunately, our Federal Deficit pales in comparison to our entitlement obligations of Medicare, Medicaid, and Social Security. Some estimates put the outstanding obligations to our seniors at over 60 trillion dollars.
We can argue about both parties being bad stewards of the taxpayer’s money. We can argue as to why money paid into Social Security and Medicare was not put aside and was instead spent on other government programs, but none of these conversations leads us to solutions.
Correcting nearly 60 years of irresponsible government spending and overspending is going to hurt. No one is going to be immune from it. All government entities and the over 300 million citizens will take a blow either directly or indirectly by these long overdue changes that are imperative in getting our fiscal house in order. We can sit around and blame the other political party but the reality is that both political parties are to blame as is the political process that punishes politicians who are bold and honest about the tough measures we must take. We as voters are to blame by not forcing our elected officials to show fiscal restraint especially when we have personally benefit by government spending.
Democrats must understand that the social programs they champion will be on the chopping block. Republicans must realize that Defense spending will have to be cut as well. Finally, both parties need to be aware that massive entitlement reform is needed unless we want to be willing participants in the worst case of inter-generational theft where our children and grandchildren foot the bill. The notion that we can grow our way out of these problems or we can simply cut discretionary spending is a Fantasy Land notion not rooted in basic mathematics.
The reality is that we have grown used to and even expect to be over promised things by our government. Now is the time for both Democrats and Republicans to join hands, take a collective plunge and start under delivering on those years of over promises.