Every February we get all worked up about the national debt, and this year has been no exception.
As usual, the political parties are arguing bitterly about deficits. And as usual, neither knows how to fix the debt.
President Barack Obama is all about delayed gratification; he likes measures that reduce costs long-term. In theory, that describes his health care bill — not much immediate change, but major savings over the next decade.
And his budget reflects the same ethos. It’s all about reform and investment. Fixing Medicare, so that it’s more efficient later, enhancing infrastructure, to promote smart growth later.
Republicans, on the other hand, just want to spend less money now. They’ve proposed massive and immediate cuts to government spending on social programs, economic development and foreign aid.
Both sides agree that government is too expensive. The Democratic response is to make it more efficient, so we get bigger returns on our investment. The Republican response is to make it smaller and cheaper.
As debt management strategies, they each have their merits. But neither is a credible debt-reduction strategy.
Debt management means living on credit, paying hundreds of billions in interest every year. Discretionary cutbacks, cost diffusion and growth freezes — these are debt management tactics that can slow the rate at which our debt increases. But debt reduction means making our debt smaller, and none of these tactics can do that.
Republicans can cut every discretionary program in the budget, and mandatory spending will still swallow us. Obama can wring out every ounce of inefficiency, and our government will still be too expensive.
It’s not that they’ve got the wrong plan. It’s that, at this point, no budgeting strategy is going to cut it. The national debt is a cultural problem. We consume too much, expect too much and contribute too little.
In the real world, owing money means making sacrifices. Paying bills means eating in, working hard, riding the bus.
But as a nation, we’ve transcended financial responsibility. We print money, abuse cheap credit and live the leveraged life.
We can have large houses, cheap gas and big government. Or we can live debt free.
We can’t do both.
The hard truth is that paying America’s bills will require great sacrifices by ordinary Americans. We’ll have to work hard, own less and pay more.
We’ll have to dramatically scale back what we expect from government.
We’ll have to recalibrate social institutions and reposition ourselves internationally.
We’ll have to rethink families and the way we treat our elderly.
We’ll have to revisit health care.
And most of all, we’ll have to bring back risk.
This is a time for moral leadership, not political bickering. And we have a pretty good moral leader in the White House. This could be Obama’s “ask not … ” moment — though we’d probably punish him for it.
As a nation, we owe $14 trillion. Without sacrifices from ordinary Americans, there’s only so much government can do about it.
Reach John at john.a.gaylord@asu.edu
