How is it, the world might fairly ask, that the United States with all its brainpower and creativity can be so, well, stupid?
Not stupid in everything, of course; indeed, perhaps not in much at all. But when it comes to governing themselves, Americans are making matters harder by a resolute determination not to face real facts. And those of us who live nearby will feel the effects of this unfortunate determination.
Today, U.S. politicians will face a fact – one that they arbitrarily created, something called “sequestration.” This word, like so much about what happens in the U.S. Congress, has an unreal quality about it but very real consequences.
“Sequestration” means action caused by lack of action; namely, that when Congress in 2011 set about trying to cut the federal deficit, it decreed that in the event of failure, mandatory cuts totally $1.2-trillion would be imposed over 10 years.
Those cuts begin today: $85-billion of them touching equally the military and domestic programs. What happens is simple: The Treasury will not issue departments money for which they had budgeted, so the departments will be scaling back. And that will mean fewer services – for border service agencies, air traffic control, meat inspection, national parks, just about everything the U.S. government does.
This across-the-board method of cutting is nuts, the antithesis of proper budgeting. You might even argue that given persistently high unemployment, fewer cuts should be made now but larger ones later, if and when the economy is stronger.
No matter. When arbitrary deadlines require ill-considered measures, the results are predictable chaos, inconvenience, lack of preparation and, of course, endless name-calling and finger-pointing as to who is responsible for the mess.
Which is as it has been in Washington for some time now between the Obama administration and the majority Republicans in the House. There have been crises over the “fiscal cliff,” the “debt ceiling” and now “sequestration.” Ratings agencies have already downgraded U.S. notes. And the world is looking on with a mixture of exasperation and apprehension as the world’s leading power inflicts additional wounds upon itself, to the point where one might ask: With a political system like this, reflecting a people who love their country but cannot agree on how to govern it sensibly, who needs enemies?
“Sequestration,” accompanied by the now-familiar rhetorical Sturm und Drang, is not the beginning of the end but the end of the beginning, to borrow a phrase, because the nation’s debt is now so high, its deficits so large (declining in the next three years but set to rocket thereafter), and its politics so poisonous and paralytic, that further crises around the same fiscal issues are assured.
The raw, real facts are these: The federal budget deficit will be $845-billion this year, which is 5.3 per cent of GDP. That will be the first budgetary deficit less than $1-trillion in five years.
The deficit, according to the Congressional Budget Office, will head down to a manageable 2.4 per cent of GDP by 2015, but then start soaring again owing to an aging population, rising health-care costs and growing interest payments on the national debt. By 2023, if current laws remain in place, the CBO says, debt will equal 77 per cent of GDP and be on an upward trajectory.
Perhaps like politicians everywhere, U.S. politicians prefer to punt the problem rather than tackle it. So they invent slogans. They create bipartisan commissions whose recommendations they ignore. They (and their media supporters) shout incessantly at each other. They make mini-decisions, putting off the hard ones until another self-imposed deadline.
There has to be a mixture of tax increases and spending restraint to stabilize and then improve the fiscal situation. That was the message of two bipartisan commissions; that’s the opinion of most economists.
Republicans talk about eliminating or curtailing tax deductions, but flee when asked about when, how and by how much. Democrats see no spending program they do not believe essential. And no interest group has ever benefited from a program for which a rationale for continuation could not be invented.
And so the Great Republic meets another arbitrary fiscal deadline from which it (and friends) will suffer because political actors are paralyzed by ideological certainties that shield them from facts.
