It has been my experience over many years that our government too often approaches our most vexing problems, not with brilliant strategies or intuitive breakthroughs, or even sensible compromises, but rather by what my mother used to call "muddling through.'
A case in point is the most significant challenge facing our country today -- the fiscal mess characterized by unprecedented deficits and rising national debt. The rising cost of sustaining a growing class of elderly is consuming an ever greater share of our national wealth. The world is increasingly torn by unrest and terrorism, requiring a major military commitment by our military services. The federal budget was already stretched to the limit when the Great Recession hit and our government resorted to even more massive spending and creation of new money to avoid an economic calamity.
The consequent sea of red ink fostered a public uproar and intense pressure on our leaders to rein the deficit spending in. Unfortunately, Congress and the White House were unable to achieve a breakthrough agreement. The result was the notorious sequester -- arbitrary spending cuts across the board -- that no one wanted and few considered a desirable outcome. But it is what it is -- muddling through.
To some extent, muddling through is easing the crisis. Last week the American Enterprise Institute reported that the annual budget deficit, which was more than 10 percent of GDP in 2009, is on track to be about half that this year. That is an improvement but it is still much too large.
There is danger that this little glimmer of good news will lull us into complacency. The sequester remains bad policy and a dereliction of duty by our government. We now have three competing budgets on the table with no compromise in sight and yet another showdown over the national debt limit is looming. I can see a major brouhaha a few weeks from now when Congress adjourns for its August recess without raising the debt limit and we once again face a possible default.
Muddling through will not do. The deal on the air traffic controllers last week, which was a jerry-built contraption if ever I saw one, offers a discouraging preview of what is in store as Congress scrambles to deal with specific budget crises without addressing the underlying big issues. This is not a sensible way to manage our national affairs. We need a big picture strategy that enjoys bi-partisan support.
I have said before and here say again we absolutely must have a serious long-term strategy for
deficit reduction which means taking on entitlements. But if deficit reduction is to serve its purpose - reducing total debt - we must have a near-term growth strategy. Growth is absolutely essential to our nation's future. It is often said that we need a tax system that looks like it was designed on purpose. I would say the same about our fiscal policy.
Jerry Jasinowski, an economist and author, served as President of the National Association of Manufacturers for 14 years and later The Manufacturing Institute. Jerry is available for speaking engagements. April 2013