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March Madness

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Despite the millions filling out their NCAA basketball brackets, March Madness is not only being played out on the hardwood floors across the nation. It's also on display on the floor of the House and the Senate. And the consequences of continuing the madness appear to be lost on the Congress and the President.

In the past month we have seen the swiftness with which a crisis can erupt. The late Gen. Bill Odon, deputy national security advisor to President Carter, defined a crisis as a situation that was developing faster than the decision-making process could react. That was certainly the case with the popular uprisings in the Middle East and North Africa. And the shock and epic destruction caused by the Japanese earthquake and tsunami demonstrate that natural disasters can also overwhelm our capacity to cope.

So what lessons have our political leaders learned from the dangers that can erupt without time to react. Apparently very few, at least as far as the precarious U.S. financial situation is concerned. Perhaps because we have been living so long with the deficit and debt swords hanging over our head, we believe that we will be spared forever. But dictators who ruled with absolute power for thirty and forty years never saw the uprisings coming until it were too late. The tsunami warning system gave adequate warning to Hawaii and the U.S. West Coast, but not to those on the Japanese coast.

While there were faint signals of the coming storm in the Middle East and some hints of an impending earthquake, these are more noticeable in retrospect than they were at the time. This is not the case for the U.S. financial crisis. It has accurately been called "the most predictable financial crisis in history." Yet there seems to be a general assumption among our nation's lawmakers that a financial crisis will be kind enough to await the outcome of the 2012 election. And there also seems to be an assumption that the crisis will come on gradually and not as a non-linear event. Those assumptions are the only rational explanations for the continuing Alphonse and Gaston game going on in the nation's Capital.

The co-chairs of the president's bipartisan deficit reduction commission, former Senator Alan Simpson and former Clinton Chief of Staff Erskine Bowles, testified to the Senate Budget Committee on March 7 that the crisis could come in the next two years or perhaps even by the end of this year. Or like the earthquake, it could come in the next few weeks. What if Japan stops buying U.S. Treasury bonds and redeems what they have to finance reconstruction of the devastated northeast? What if the Saudis slow bond purchases in order to finance social projects that buy off protesters in the Kingdom or Bahrain? Or what if the entire Gulf Cooperation Council (GCC) decides to slow roll bond purchases to show their unhappiness with U.S. policy toward Bahrain?

So what are our political leaders focusing on to get our house in order to meet the looming crisis and prepare to act swiftly? Are they considering measures to reduce entitlements in the mid to long-term, the only way to make significant inroads into the burgeoning debt? No. Are they working on the FY12 budget with provisions to address those long-term issues? No.
Is the president putting forward specific proposals for reducing entitlement expenditures? No. Has the GOP leadership acknowledged the need for revenue increases? No.

Instead, Congress is working on cuts to the budget for the fiscal year that is almost half over and they are doing it in two-week salami slices. The current funding measure expires March 18, as the NCAA tournament begins. And the likely final short-term extension is planned for near the end of the tournament, April 8. But the madness in Congress appears destined to continue. Short-term battles will drive out long-term considerations and poison relations needed for rational dialogue and compromise. And the difficulty in making sensible short-term reductions will not build confidence in our ability to address more critical issues. And the inability of Congress to react quickly if the crisis arrives with a jolt is not apparent.

Let us hope it is an exciting tournament so we can escape from the sorry scene in the nation's capital. And let us hope we are not surprised by a financial tsunami or earthquake before we have a plan in place to cope.