THE BLOG
12/07/2010 10:34 am ET Updated May 25, 2011

Deficit Tests Our Democracy

After a disaster we look back to see what we should have done differently. The Challenger retrospect revealed a flawed launch decision process. The failure to find Iraqi weapons of mass destruction disclosed weak and exaggerated intelligence. Katrina showed that Mother Nature, poor planning and weak design could fatally combine. 9-11 taught us that an airplane could be a weapon of mass destruction. The sub-prime mortgage fiasco popped the canard that we should overreach our income when buying homes.

These crises and lessons, while horrible and painful, did not test or threaten our unique form of democracy. However, a century from now, historians may declare that our nation failed because our elected leaders did not confront and resolve our budget deficit problem.

I applaud President Obama for trying. Failing to get congressional approval of a binding vote from a deficit commission, he tried a voluntary approach. He appointed a deficit commission, and they have put forward a plan to increasingly lower the annual deficit. The measures proposed are difficult but long overdue - bitter medicine to avoid grave illness.

The plan, if enacted, will avoid the tougher situation we will face in the next decade: our lenders get nervous, interest rates rise, and debt consumes our budget - shriveling funding for national defense, children, elderly and the poor.

The issue is not whether the Obama debt commission's plan will work. The math paints clear choices.

The issue is not even whether the plan fairly shares the pain. Yes, the entitlement crowd complains that age 65 is a sacred retirement milepost, but its historic relativity to lifespan is irrelevant. The anti-tax people protest that by some definitions the plan raises taxes without guarantees of spending cuts. Others whine that certain historic incentives like the mortgage interest deduction are divine and more important than our national health (yet, when Congress eliminated the credit- card interest deduction, somehow we kept borrowing).

Rather, the big issue is whether our cleaved parties and the American people can address and avoid the impending debt crisis. The jury is out, but the tea leaves concern me.

On the one hand, with roughly half of Americans receiving government payments, we may be past the tipping point of finding politicians who are willing to risk reelection by cutting largesse. With only half of Americans actually paying income taxes, the entitlement society is putting the productive society at risk. Politicians have responded by avoiding the issue, and the media and American public have been complicit in this denial.

Take the 2008 presidential election. The choice was either a candidate promising bigger government and no tax increases for all but wealthy Americans, or a candidate promising no new taxes and not offering any spending cuts.

After the big government candidate was elected and delivered on his promises, the 2010 voters voiced concern about government spending. Yet, even in the 2010 election, few candidates described how they would cut government spending. The earnest promise of cutting "waste, fraud and abuse" is the bi-annual electoral ruse. It avoids the challenge of saying which programs will be cut or what taxes will be raised. The only alternative to spending cuts or taxes is economic growth. Yet, no economist envisions the type of amazing growth necessary to get us out of our fiscal mess without serious cost cutting, tax increases or a combination of the two.

We are not holding legislators accountable. We pay them to decide among competing priorities. Yet, because of re-election concerns or ideology, members of Congress have been unwilling to make or advocate necessary policy choices. Republicans have signed the pledge on tax increases and have shown no stomach for real cost cutting. Democrats are happy to raise taxes on jobs creators, but they also are disinterested in the tough challenge of budget cuts.

American business leaders are aghast. They view budgeting as a tool for setting priorities by separating the mission critical from the requested. That's how businesses and countries succeed.

How is it that a new 2010 British government has already decided and begun executing a deficit reduction plan? Americans, sadly, are struggling to attract enough votes just to make a credible deficit commission suggestion to a Congress seemingly incapable of even addressing a unanimous report. How is it that we ask young Americans to risk life and limb abroad while legislators won't even risk re-election to make tough decisions for our country?

The board of directors of the Consumer Electronics Association (CEA), the organization I lead, representing 2,000 technology companies, decided years ago that nothing is more important to the health of our industry than the health of the U.S. economy. Moreover, they agreed that our long-term economic health is in danger primarily due to the actions of our government, especially the exploding deficit.

Last week, the CEA board reaffirmed this view and embraced the plan of the Obama deficit commission. While no one likes the sacrifice it entails and we can debate the mix of cuts and taxes, it is our best and, at this point, only hope to avoid the long- term economic destruction of America.

If we do not address the deficit, we are threatening not only the nation we leave our children, but also the viability of the representative democratic experiment that is the United States.

Gary Shapiro is the president and CEO of the Consumer Electronics Association, which represents more than 2,000 U.S. technology companies.