Concern for Our Future
Posted in: Economics, News, Politics
The question to ask about the president’s eye-popping budget, also rolled out last week, is whether it prepares the country for its future—or shackles it to past decisions that our leaders would rather not confront.
This quote from an article written by the dean of the Columbia Business School summarizes many of my feelings on the subject of the size and budget of the U.S. government. Most of you probably heard recently about the $3.8 trillion Obama budget with future ‘plans’ for reducing the deficit. As I have said many times on this blog, budget deficits and national debt do not concern me too much. It certainly does not worry me nearly as much as a major meltdown of our financial system (which it appears has been avoided). But in the long-run a growing national debt can pose problems for the economic health of a nation. The analogous situation for an individual seems obvious: In the short-run using credit to purchase a car has great benefits – you can get to work and be productive. Using a credit card to finance monthly purchase regardless of your current cash flow and pay it back after you have your pay checks accumulated at the end of the month, makes sense. Taking out a loan to improve your house (although possibly questionable in the current housing market) can also make sense to increase the value of your home. In the long-run though, interests rates make the amount you owe sky rocket and your credit rating falls.
Even the NY Times is able to understand a reasonable approach to this problem:
No one is calling for balancing the budget in a single year. Yet small cuts now, with bigger steps such as limiting entitlement benefits in the future, might send a positive signal to the markets and perhaps spur the recovery.
What I can’t figure out is why the President’s budget and Congress aren’t taking this sort of attitude and putting it to work. I also can’t figure out why people mock the ‘tea parties’ going on around the country (which I’m not specifically endorsing, just observing a phenomenon in popular culture/media), but they laud to no end protests for global warming. Starting a popular political discourse for a slimmer, more efficient government seems like a great idea considering what the future could hold otherwise. I can guarantee if the government loses its credit rating, starts taxing at ridiculously high rates, and loses its credibility as a world financial leader no one is going to be too concerned about meeting CO2 reductions.
If someone in Congress or the White House can turn this around and by ‘this’ I mean the attitude that turns a blind eye to any sort of serious talks on fixing the budget and the fiscal status of the U.S. government, I would vote to re-elect them regardless of party or support them in their run for office. I have a feeling, though, that if I strictly hold that position, I might not be voting for anyone in 2010 or 2012.
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