Frank Pignanelli & LaVarr Webb: What the fiscal cliff tells us about America, its problems
After months of stalemate, Congress managed to stave off the immediate "fiscal-cliff" crisis but didn't solve anything long term. That raises some important questions.
Why is it so hard for Congress to forthrightly solve America's fiscal problems?
Pignanelli: "This country has come to feel the same when Congress is in session as when the baby gets hold of a hammer." — Will Rogers. The recent actions by Congress to resolve the "fiscal cliff" remind me of the dilemma many of us face when confronted by late night urge for munchies. Usually, our only quick options are high-fat snacks (Cheetos) or "mystery meat" meals (convenience store hot dogs) — for we are too weary to develop a low-carb nutritious alternative. Like the "fiscal cliff," this is not a great choice: hunger satiated by crappy food or an unsatisfied feeling in the gut, in a situation created by another bad pick — staying up too late.
The Healthcare Economist details that 54 percent of the taxes Washington, D.C., collects are used for health care expenses incurred in Medicare, Medicaid, veteran coverage, federal employee and military health benefits, etc. A major revamp of the medical services delivery system must occur to resolve our fiscal condition. Studies indicate that more-efficient care also results in greater quality. We also have to wrestle with tax reform, overregulation, etc.
But all major changes in government guarantees winners and losers, and politicians only want to make winners. In our history, few leaders have asked all Americans to personally sacrifice for the greater good — which must happen again to solve this complex problem.
Webb: We are in a very dangerous cycle. Over many generations, foolish politicians at the federal level have given citizens and businesses far more in benefits and services than they are paying in taxes. So many citizens and businesses have become so dependent on a wide variety of federal services that politicians can't shrink them without facing an uprising and almost certain defeat at the polls. Politically, it is much more popular to give more and more than to cut services. That's the main reason Mitt Romney lost the election. That's why Republicans were unable to win spending cuts in the fiscal cliff negotiations.
Because the federal government has the ability to print money, borrow and run up unlimited deficits, little incentive has existed to reduce spending or exercise discipline. President Barack Obama has been the most reckless president in history, adding $1 trillion a year to the federal deficit.
Unfortunately, such careless spending can't last forever. Interest payments alone will eat up a huge share of the federal budget. The nation's credit rating will collapse and credit markets will dry up. At that point, the nation will be in danger of financial ruin. Instead of minor benefit reductions that Republicans have proposed to save Medicare, Medicaid, Social Security, student loans, unemployment benefits, etc., those programs will collapse entirely. Our children and grandchildren face a bleak future.
What does dysfunction in Congress say about America's system of governance?
Webb: It clearly demonstrates that straying from our nation's founding principles is foolhardy and dangerous. Congress is a mess and deficits are spiraling out of control for a simple reason: The federal government is trying to do too much, more than it was ever intended to do. Highly centralized government in a nation as big and diverse as America simply doesn't work. If the federal government was limited to the duties intended by the founders, perhaps some irresponsible states would be in trouble, but the nation as a whole would be prosperous and solvent.
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