Still, as a citizen, and indeed one whose pension arrangements are tied to the economy, I cannot help noticing certain things in the grim present.
It seems that with the incipient passage in the Senate of the bill raising the debt ceiling (and ostensibly including radical measures about the economy) we have dodged the bullet. Only temporarily I fear, for when one looks past the smoke and mirrors, the new legislation simply sets the stage for a continuation of the profligate policies that have brought us to this pass.
How's that again? Doesn't the legislation shred the safety net, destroying the hopes of tens of millions of the aspiring and disadvantaged? Well, I would agree about the shredding of the hopes part, but the bill will do very little to achieve the needed fiscal reform.
Following a long-established form of chicanery, the savings are mostly "backloaded"; they are to occur in the out years. During the first year only $21 billion dollars will be saved, if that; even less in the following year. The remainder of the supposed 917 billion would have to be approved by successive Congresses. Given the mood of the electorate to "throw the bums out," the composition of the next House of Representatives will probably be very different from the present one; it can simply decline to approve the ambitious frugalista agenda.
Increases in revenue are desperately needed. These are fervently opposed by the Tea Partyites and their dupes, but also, more covertly by the left, which believes in the mirage of "growing the economy." Alas, the unemployment rate is not likely to come down soon, maybe ever because so many of the jobs have gone to Asia, gone for good.
If the absurd Bush tax cuts were simply allowed to disappear en bloc next year, a lot would be accomplished. However, Obama has already muddied those waters by saying that only the taxes on the rich should be restored. The thing can only be done if it is all or nothing, and that means a positive utilization of the crippling powers of governmental grid-lock.
Another pie-in-the-sky provision is reduction in military spending. A little later, when we get to that juncture, it will be found that "for pressing reasons" of national security we cannot do that. The real reason of course is that the military-industrial complex is ensconced in too many congressional districts.
In short, very little has changed--or is likely to change. We will continue spending beyond our means, and our economy will continue to fall behind that of other, more dynamic countries.
I will probably get lynched for saying this, but I believe that in some ultimate sense the Tea Party is right. We cannot just keep putting money on the national credit card, promising that we will pay our bills in the "out years." That is what the English call the never-never.
Labels: the economy