I've purposely tried to stay away from politics here (except for briefly covering Maria's run for office in Canandaigua, which I'm sure I'll come back to before November). In real life, I've found that you bring a political topic into a conversation at some considerable risk. The risks are two-fold. First, you may find yourself talking to someone who cares just a bit too much. Second, you might make somebody angry. Do I really want either of those two things to happen? The answer is "no."
Growing up, I had an interesting political childhood. My dad was (is) a Democrat and my mom was (is) a Republican. Listening to them debate issues as a little kid, I walked away thinking that Republicans (that would be my mom) were rule-followers who didn't like change. Democrats (that would be my dad) thought that someone was always trying to take advantage of "the little man." To this day, I still wonder if my mom is really a Republican or if she just wanted to cancel out my dad's vote.
Anyway, I got older, registered to vote, went to college, majored in political science and economics, started to form my own opinions about things, got a job, got married, had kids, bought a house, got another job, and started to see some of my opinions about things start to change. Then I got even older, saw my kids growing up, listened to their observations about the world, and started to get frustrated by career politicians and their relentless short-term focus which seems to be taking away the long-term options for my kids. You know what? My opinions about things continued to change.
So, let's talk about the debt ceiling fiasco that we've been dealing with for the past few weeks. A couple of things seem incredibly obvious to me:
- We owe too much money.
- We have to cut entitlements.
- We have to raise revenue.
I stole the title for this post from Ezra Klein's article in The Washington Post's online version today. I've never done this before, but I'm going to past a long section of his article right here. He says it better than anyone.
The debt-ceiling deal passed the House last night, and it did so with ease. With 269 "yea" votes, the bill was never even close to failing. And a good thing, too: there were mounting signs as the weeks wore on that the market had had just about enough of Washington's games. A TARP-like failure could have provoked TARP-like chaos in the markets, where even a quick congressional recovery doesn't fully undo the damage the initial fumble causes to investor confidence.
But with the details understood and the legislation on its way to a quick approval in the Senate, it's worth stepping back and saying what we all already know: This is a terrible, no-good, very bad deal.
It's not just that Congress waited until the last minute, taking an unnecessary risk in a fragile economy. And it's not just that the tough decisions got punted once again. This is a bad bill at a time when the economy -- and the American people -- needed a good one. It's a bill that does too little now, and too little later, and it comes in lieu of an obvious, achievable solution that would have done better.
The two reigning theories of our current economic moment are not opposed to one another. The economy is weak now, with too little demand and too little growth, and threatened by mounting deficits later. The answer, as any economist can tell you and as many told Congress, is simple: do more to support the recovery now and more to cut deficits later. In the short-term, we should expand the payroll tax cut, make a massive investment in infrastructure, continue funding unemployment insurance, and do more to aid the states. In the long-run, we should cut spending in entitlement programs as well as discretionary programs, and raise significant revenues and modernize the tax code by flattening the base and closing loopholes.
These two priorities don't conflict. In fact, they support each other. Faster growth now will mean smaller deficits later. And politically, more stimulus now would have helped Democrats agree to more deficit reduction later. But our political system isn't very good at both/and. It's more suited to either/or. And so Republicans fought stimulus now and couldn't agree to the revenues necessary for significant deficit reduction later. So we got neither. We're pulling support out from under a teetering economy now and we're punting the hard decisions on the deficit to yet another committee, and yet another manufactured deadline.
It's been incredibly frustrating to watch this mess play out. The market's reaction today was perfect. The markets get that this deal does absolutely nothing to address our problems other than punting the tough decisions to a later date. My guess is that our friends in Washington were certain that, once they'd agreed on a deal, the market's would rejoice. How wrong they were. How screwed we are.
OK -- that's it on this topic (you hope, right?). By the way, did you hear that WHFS is back on the air? It's no longer 99.1 WHFS -- it's 97.5 WHFS. I might actually have to listen to something other than Sirius XM.