Typically, a legacy or inheritance benefits the recipient. However, that's not the case with the federal deficit and the national debt. On November 5, the newly elected president will be burdened by a federal deficit and take charge of a government that is spending over $400 billion more than it takes in.
Last Wednesday night, I attended a screening of the movie, I.O.U.S.A. which examines the rapidly growing national debt and its consequences for the United States and its citizens. Broad in scope, the movie provides an overview of the American government's spending and the measures implemented in years past when faced with revenue shortfalls. Interview subjects range from the average American to former government officials such as Alan Greenspan, Paul O'Neill, Robert Rubin, and Paul Volcker. I was impressed by David M. Walker, former Comptroller General and his Fiscal Wake-Up Tour.
How's this for the current fiscal state of the union:
·Current deficit is in excess of $10,000,000,000.
·Current population of the United States is 304, 941, 288.
·Current debt per capita is in excess of $31, 000.
·A trillion dollars is approximately $3,279.43 for every man, woman and child.
At the screening, I met A. Harry Zeeve, National Field Director for The Concord Coalition. In a follow-up email, I asked Mr. Zeeve why he thought we're facing the situation at hand. He said, "We have been living beyond our means for quite some time. On Wall Street, there has been a lack of transparency and accountability which are problems that plague the federal budget as well. On Wall Street, as with the federal budget, there has been far too much short-sightedness. We would be in a far better position today, had we had effective regulation or reform in place earlier rather than having to deal with a crisis. Waiting for a crisis only added to the cost."
I wondered if there was any critical turning point along the way to the prevailing crisis. Mr. Zeeve pointed to a few saying, "There were a number of wrong turns that we took, but a few stand out. In 2002, budget controls like discretionary spending caps and the Pay-As-You-Go ("Paygo") Rule expired. In 2003 three large tax cuts were passed, Medicare Part D for Prescription Drug Coverage was passed and we borrowed to pay for the war. The message was that we could have it all without sacrifice. 2003's "guns and butter and tax cuts" trumped the 1960's mere "guns and butter."
In charting a path to recovery, I asked Mr. Zeeve if he had any recommendations. He offered, "To get back on track, at a minimum, we must stop digging the hole any deeper. The 1990s showed that budget controls like discretionary spending caps and Paygo can help, but we must honestly confront the enormous long-term shortfalls which are driven by demographics and healthcare costs that rise faster than the economy grows. Leadership and bi-partisan cooperation are essential if we are to avoid a crisis. I would have the new President read our latest Issue Brief, "Nine Challenges for 2009."
The elections are just over a week away. The Concord Coalition has shortlisted key questions voters should ask candidates about the budget and the nation's fiscal future. They are as follows:
·Do you believe that budget deficits matter?
·Do you have a plan to balance the federal budget?
·What specific spending cuts would you propose to help balance the budget?
·What assumptions do you make regarding the future of defense spending?
·How do you plan to deal with the budgetary consequences of extending some or all of the expiring tax cuts?
·Will you be as committed to slowing the growth of health costs as you are to expanding health care coverage?
·What steps would you take to close Social Security's long-term funding gap?