10/18/2012 08:39 am ET Updated Dec 18, 2012

The Elephant in the Room

The second debate between President Barack Obama and Republican challenger Mitt Romney was a standoff in my view, with President Obama returning to form and Romney continuing his confident performance from their earlier exchange. By and large, Obama partisans were so relieved by their candidate's strong showing that they are proclaiming him the winner. It depends on your point of view.

But there was no mention of the impending fiscal cliff by either candidate or by the moderator, Candy Crowley. Once again, the elephant in the room was virtually ignored.

The main thing the public needs to know is how the candidates will deal with the greatest challenge to our country -- the massive federal deficit. We are spending over a trillion dollars a year more than we take in. It is without question a severe threat to our fiscal integrity and yet neither Presidential candidate felt obliged to get into it in any meaningful way in either the first or second debate.

To the extent that the candidates noticed the elephant, they resorted to their respective parties' time-worn clichés. The Democrats advocate taxing the rich and the Republicans insist that cutting spending is the answer although they are vague about where those cuts will fall. Romney boasts that he will cut Amtrak and National Public Radio -- piddling items in the overall federal budget. As for Obama, he walked away from Simpson Bowles and has never offered any significant suggestions for reforming Social Security or Medicare.

The Republicans have done themselves and the public a disservice by digging in their heels on tax increases. We need to make tough decisions on entitlement programs, but instead we are left contemplating the Republican determination to cut taxes for billionaires. This diversion enables Obama to simply take a pass. This is theater of the absurd.

The American public knows taxes must rise. It is reflected in every poll. But raising taxes alone cannot begin to rein in our deficit. A new study from the Democratic centrist group Third Way lays out the numbers in boldface. Soaking the rich simply will not do it. Even if the top rate goes to 50 percent, and the amount subject to Social Security taxes goes to $107,000, the national debt will double as a share of the economy by 2040. "Relying on taxes alone to hold long-term deficits at 3 percent of GDP would require phasing in a 60 percent tax increase on the median-income family, raising its annual tax burden buy $6,200 in 2012 dollars," the report said. That is politically impossible and economically crazy.

We absolutely must deal with entitlement spending. Each year tens of millions more people start drawing Social Security and relying on Medicare and Medicaid. This is where the basic problem lies and frankly I see little evidence that either party or Presidential candidate is willing to confront it. They sometimes speak vaguely of hard choices but offer no specifics. Each of us should use our individual leverage and contacts to demand that both Obama and Romney specify how they propose to reduce the federal deficit.

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.