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Our Bankrupt Political Dialogue and the Human Costs of Budget Cuts

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The parade of posturing in our nation's capital continued through this past weekend's incredible heat and humidity. You just knew our politicos' love of the spotlight would ensure deadline bargaining to milk all the free media they could out of this self-created crisis. While intense political conflict is a great American tradition, our economy is too complicated to withstand this type of attack without suffering damage.

There are some real changes in America's economy and society that require a new approach to generating revenues and structuring government programs. The conversation on these issues is a few decades overdue, but our polarized political community is incapable of holding this conversation. We need to focus national economic policy on environmentally sustainable expansion, public investment and effective public-private partnership. Instead we are fixated on cutting revenues and expenditures to reduce the debt. Our elected leaders are too busy talking past each other and maneuvering for political advantage to even discuss our economic challenges.

A couple of weeks ago I wrote that:

"My hope is that before these leaders cause a national default, they come to their senses and learn the importance of a national community and a shared sense of purpose. The deficit and the job crises are symptoms of the decline of our national community. They will only be solved when we learn to trust each other as neighbors rather than demonize each other as political enemies."

With a little more than a week to go before Congress scares the living daylight out of the global financial community, the crisis continues. I suppose something will prevent default, I don't think these guys are crazy enough to drive into that ditch. Of course it might come down to the president declaring a national fiscal emergency and unilaterally raising the deficit ceiling on his own. I'm guessing the courts will want to take their time resolving that little constitutional crisis.

I find the discussion of deficits and cutting benefits curiously devoid of content. When Bill Clinton was president we ended "welfare as we know it," and moved to a system of workfare, food stamps, and a less secure social safety net. America's poverty problem has not been solved and the number of poor people in this country continues to grow. According to the U.S. Census Bureau, the poverty rate for individuals grew from 12.2% in 2000 to 13.2% in 2008. The family poverty rate grew from 9.3% to 9.7%. Children in poverty during the same time period grew from 15.6% to 18.5%. The percentage of Black and Hispanic children in poverty exceeds 30%. When we cut taxes and funding for "entitlements" we may, as the right wing maintains, improve opportunity for some people. However, the price for those lower taxes is greater pain and suffering for millions of poor children. These cuts are not economic theories but economic realities; they have real impact on real people. Where are the news media reports on this issue?

What about Social Security? We know that America's population is aging. Birth rates are lower and people are living longer and healthier lives. In 1990, 24.6 million Americans were above 65 and covered by social security. By 2008 that number had grown to 32.1 million people. If we cut social security and Medicare payments, or they fail to keep pace with rising costs, some of these people will lead lower quality lives, some will suffer from inadequate health care and some will die before their time. Some of those suffering will be our parents and others that we love.

What else will happen? For those elderly fortunate to have the support of their families, or have managed to put away secure savings, the impact may be slight. However, for many middle class families, declining Medicare and Social Security payments will result in new financial pressures. While some families may save a little on their taxes, these same families may struggle to find the resources to provide for their elderly parents.

I hear a lot about the deficit and the need to cut government spending, but very little about the impact of those spending cuts on real people. Old people. Children. Didn't Charles Dickens write this book? "Are there no prisons... and workhouses?" At the start of A Christmas Carol, Scrooge thought that starvation might be a solution to overpopulation. Is America getting prepared to return to that debate?

The other issue that is receiving similar simplistic responses is the need to create opportunity and employment here in America. We need to figure out our place in a rapidly evolving global economy. The political dialogue is filled with discussion of government policies that discourage or stimulate job creation, but this debate always strikes me as ideological and incomplete. When I review data-driven economic analyses these days, I see more questions than answers.

Some pieces of the puzzle are obvious, although we don't know if they will really work. Yes, we need to encourage private sector job creation, but we also need to invest in public projects that directly create jobs. We certainly should invest public resources in renewable energy and energy efficiency research and infrastructure. This national project could have the same impact on America today that the interstate highway system had in the 1950s and 1960s. Government must play a central role in generating and investing resources in physical and scientific infrastructure. Most of the wealth generated in this nation over the past century has been the result of technological innovation. We need to experiment and figure out how invest effectively in the modern economy.

These are tough problems, requiring good faith efforts and trust to be solved. It is clear that we have none of that in our national political dialogue. Everything is about positioning and posturing for the next election. My one hope is that the American public is getting weary of the noise. The negative ratings of both parties in Congress continue to grow. As Nate Silver observed recently in the New York Times:

"A new CNN poll finds that 55 percent of voters have a negative view of the Republican Party, tied for their second-highest unfavorable score since CNN began asking this question in 1992...The news for Democrats is not any better. Some 49 percent of voters now hold a negative view of the party, according to the poll. Although this figure is slightly better than for Republicans, it matches the Democrats' record high unfavorable rating of September 2010 and is part of an upward trajectory that has persisted for the past three years."

It is time to begin an honest national discussion on the issues of sustainable economic growth and the nature of our social safety net. We need to invest in our future economic growth and care for those who cannot care for themselves. I am betting that Americans will be willing to pay to be sure that old people and poor children receive the help they need to lead a decent life. This is a compassionate and charitable country, and no effort to submerge and hide the impacts of cuts will work. I am also betting that these problems can be solved. The retirement age will be raised, and some of this nation's great wealth will be freed up through taxes and private incentives to invest in a more competitive global economy. Of course, my confidence has no basis in the behaviors we are seeing in the nation's capital. I just need to believe we can't be as stupid and self-destructive as these folks look.