After the Spending Spree

Originally published on February 18, 2009, at http://www.politicsunlocked.com/item/after-the-spending-spree

 

Efforts to balance long-term budget through entitlement reform could help restore confidence.

Efforts to balance long-term budget through entitlement reform could help restore confidence.

 

Following the historic passage of substantial stimulus legislation, President Barack Obama must now show he is capable of fiscal discipline.  

The 789 billion spending and tax relief bill passed with overwhelming Democratic support, and despite almost unanimous Republican opposition, showing that bi-partisanship, a central theme of his campaign, proved to be harder to achieve than propose.  

The President urgently sought a short-term stimulus bill to reverse the economic decline. Now that he has achieved this goal, the President should turn his attention to the long-term fiscal health of the nation.   

Most Americans are dismayed at the fiscal irresponsibility of government leaders and feel powerless to stop the government from spending their money unwisely.  Mr. Obama has a unique opportunity to put his political weight behind drafting legislation to control long term spending, including outlays for Social Security and other so called entitlement programs, that will only take effect once the recession passes.

The government is currently committed to spend more than it is projected to take in on Social Security and Medicare.  This deficit will require spending cuts or revenue increases to make up the difference.  The public will certainly not like either solution.

Operating with a deficit is justifiable under certain conditions such as emergency needs or long term improvements, programs which could not be afforded without borrowing.  However, operating the government with a chronic deficit is irresponsible and hardly confidence-inspiring.  

If President Obama were to begin the work of entitlement reform and act with the deliberate and decisive hand that has guided his campaign and his Presidency so far, he would again succeed.  Leaders must compromise.  The public must make sacrifices.  This will truly have to be a bi-partisan effort. 

This debate must be had in the next few years, before it is too late to plan responsibly.  Why not move on it now in order to show a very skeptical public that the government is not only good at spending its money, but can manage it as well?

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4 responses to “After the Spending Spree

  1. So are you prepared to foot the bill for your older relative’s support and medical care if the government doesn’t?

  2. marcivanseltzer

    I think as a country what we need is a government that is able to make sustainable commitments, rather than promises that are not realistic. I lived in Africa last year and there is no such thing as government support. People are able to deal with many different arrangements, including great hardship. I think though that it is important for our trust in government that the politicians can show that the long-range accounts are balanced.

  3. That was not really an answer, and I don’t think Africa is a good model for the US to follow. My idea of how many Africans actually do manage to provide for themselves adequately without aid from abroad may be an underestimate, though. I’ve never been there. Did you live there like a local for an extended time, or were you vacationing?

  4. marcivanseltzer

    I lived there, but my point was that I can accept raising taxes to meet public funding needs or lowering payouts to meet limits in budget or both, but I think we need to have a plan that is projected to be solvent, rather than one that is not, but hopes others will make tough decisions to fix it in the future. The political quandary that we find our selves in is not a problem of limited resources, it is problem of poor governance. We have great riches compared to the rest of the world, and we should be able to manage our finances.

    It may be that our political parties cannot make these decisions because bringing bad news does not get a politician reelected. We have screened out of office all the people who would be willing to decide. In that case, we may need an independent commission to solve the problem. But the decisions need to be made to inspire confidence in the functioning of the system that we claim works.

    If it does not in fact work, other nations and other systems will step into the lead.

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