Zuckerman: Obama and Congress are the most fiscally irresponsible government in history
Mortimer Zuckerman rails on the stimulus debt and just about every other evil that the current spendthrifts in Washington have closed their minds to. Keynsian economics may just mean the end of fiscal responsibility. Our fiscal house is burning down and Washington wants to spend more money? He has called the current government the most irresponsible in history, via US News:
In a usnews.com post on July 26, Jodie Allen of the Pew Research Center reported that in recent weeks more academic and market economists have been urging the government to defer budget cuts and tax increases and instead provide additional stimulus to a still-fragile economy, some by continuing the Bush tax cuts. But among the public there has been a suggestive shift of opinion the other way, reflecting worries about debt. "Deficit and government spending" has jumped from 10th or 11th place as a priority for the federal government to one that is second only to job creation and economic growth. The drift of opinion is manifest in other recent polls. For instance, a CBS poll conducted July 9-12 assessed the most important problem facing the country as the economy and jobs (38 percent), with concern about the budget deficit and national debt way down at 5 percent. Yet CNN (July 16-21) has 47 percent preoccupied first with the economy, and 13 percent with the federal deficit. In a recent Time magazine poll, two thirds of the respondents say they oppose a second government stimulus program and more than half say the country would have been better off without the first one.
An old saying that can apply to the deficit is called the "rule of holes" and goes as follows: "When you're in one, stop digging." But Washington politics remains the barrier. Government programs seem to live on forever. The budget becomes a perpetual-motion machine for higher spending. New programs for new needs get piled on top of old programs for old needs.
Then there are the retirees. Their numbers and their health costs will keep on rising. There were 35 million Americans over 65 in 2000 and the number of retirees is expected to double by 2030. The impending retirement of millions of baby boomers, with their claims on federal retirement programs, comes at a time when both parties seem to be willing to worsen tomorrow's problems to win more of today's votes. The result is that the federal budget is drifting into a future of huge deficits or unprecedented tax increases, or both.
Federal spending is moving toward a higher plateau—from roughly 18 percent of the GDP to almost 25 percent by 2030. We don't know how we are going to pay for this. We don't know how the economy would fare with much higher taxes. We have seen the clouds gathering for years but haven't invested in an umbrella by adjusting federal retirement programs or taking other steps to reduce entitlements. One response would have been to begin gradually phasing in eligibility ages and tying benefits more to income. No doubt we have to think about raising the eligibility age for Social Security and Medicare, perhaps by one month for each two-month increase in average life expectancy. We will have to think of ways to reduce the cost-of-living increases on Social Security benefits for wealthy seniors by slowly increasing their Medicare premiums and leaving everybody else's untouched. We may have to allow the Bush tax cuts to expire, certainly for households earning more than $250,000 (and more for the super-rich) given the concentration of wealth in the top 1 percent of the population. It is entirely appropriate that they begin to make a greater contribution to our longer-term fiscal health.
But let's not forget, current budgetary trends are capable of destroying the country. As Bowles pointed out, according to a Washington Post report, we can't just grow our way out of this. We can't just tax our way out of this. We have to do what governors do—cut spending or increase revenues in some combination that will begin to pull us back from the cliff.
Obama must know that if he doesn't address this, he will be the president who drove us toward a debt crisis. And so too must Congress, for both have now participated in the most fiscally irresponsible government in American history.