Before I start let me be clear: None of this is simple, including solutions, but as Americans, we must demand an honest discussion and real solutions. Because as shameful as it is that the most powerful nation in the world can't reach simple agreements to fund the government, it is more shameful for certain individuals elected to higher office to avoid the larger discussion on spending and the national debt and playing with a tool which outcome cant be controlled. Not as much for me or my peers, but for our children and grandchildren as well as being a global citizen. Not reaching an agreement will have a disastrous impact not only hurting us U.S. people, but countries and citizens all over the world.
While the situation is somewhat fluid to say the least, as it stands now, the government remains shut down and the debt ceiling has yet to be raised. Sure, we seem to be making nominal progress with recent reports that Representative Paul Ryan (R-WI) has gained the support of Republicans and Democrats in both chambers for a large budget deal.
Here is the reality: Although things are much more complex, there needs to be two main ingredients for a sustainable nation: First, economic growth who acts as driver for each nation, the engine if you will. Second, reasonable governmental spending as well as incentives distributed to a variety of areas that make our life easier and safer. Our economy seems, even if slow, to be on the right path towards prosperity, having a strong engine again. The risk stays more then ever with Government: It seems that the ongoing debate over these short-term challenges has diverted attention from the items -- our outdated tax code and our ever-more-costly entitlement programs -- that are the true drivers of our unsustainable debt over the long term.
It needs more then just saying that if we just cut waste, fraud and abuse we would solve the problem, or on the other hand, that if we just tax the wealthy more our problems will be solved. Both views are more then questionable and will definitely not solve our problem.
Until our elected officials can admit that the true drivers of our nation's economic woes -- namely the $17 trillion debt and sustained deficits -- are entitlement programs like Medicare, Medicaid and social security, the conversations are for naught.
So what is the solution? For one, Congress and the president must stop the madness of government shutdowns and risks of default and start regularly talking on a bipartisan basis. But more importantly, the best way out is a "Grand Bargain" -- a deal that includes both entitlement reform and deficit-reducing, pro-growth tax reform.
I found a good approach had Marc Goldwein, Senior Policy Director of the Committee for a Responsible Federal Budget, a group I am involved in and therefore somewhat bias to it, but judge for yourself. This is what he proposed:
"The solutions are relatively straightforward: bend the health care cost curve by improving the way we pay for medicine and changing incentives for providers and beneficiaries; make Social Security solvent by slowing the growth for wealthier beneficiaries, adjusting for growing life expectancy, and bringing in new revenue from those who can afford it; reform the tax code by cutting many of the $1.3 trillion of annual tax preferences and using the money to lower rates and deficits; and replacing the mindless cuts of sequestration with thoughtful cuts to wasteful and low-priority programs."
This will require budging by Republicans and Democrats and a bit of pain for all Americans, but I am convinced that solutions like these are real and break up the stagnant political environment in D.C. I urge lawmakers to stop focusing on issues unrelated to bringing down our dangerously high debt levels through mechanisms like the sequestration cuts and instead pursue a fiscally responsible agenda that avoids default and animates economic growth. As said before, both is needed if we want to have a stable base for our country. Perhaps more than ever, the time is to put in place a plan to bring down the debt as a share of the economy.
Some of the solutions will not be easy, or need more thought, but the main question remains. Will our leaders lead?
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