The financial stability of America should not be risked in a game of political chicken.
Yet, Democrats and Republicans in Congress have shown they are willing to trigger a recession — or, perhaps, a depression — to further their political ideology.
This happened last year as the federal government reached its debt limit. In the past, Congress has routinely raised the debt ceiling so the nation could pay its debts. But in 2011 the horse trading for spending cuts and new taxes went right up to the deadline causing the stock market to gyrate, the government’s credit rating to fall and America’s Main Street economy to quiver.
Well, here we are again at another deadline. The Treasury Department announced Wednesday the government will hit its $16.4-trillion borrowing limit by the end of the year. In addition, Congress and the president will face automatic tax hikes and large government spending cuts scheduled to kick in Jan. 1.
If Congress doesn’t take action to stop the taxes and cuts from becoming law, it is predicted the nation will go over a fiscal cliff.
It should be clear to all that the annual deficit spending adding to the outrageous national debt cannot be sustained. What’s needed is a long-term plan to reduce spending to a sustainable rate that will steadily reduce the national debt.
We also believe a balanced budget amendment to the Constitution will eventually be needed to force Congress to stick with the plan to reduce debt.
A decade ago we opposed the concept of using the Constitution as a stick to balance the budget. Our thinking was the Constitution should not become a government accounting manual.
But as Congress has allowed spending to get out of control, we now find the idea of a balanced budget amendment necessary. Republicans and Democrats are so attached to their ideology they are blinded and can’t see they are about to run the country off the rails.
A constitutional amendment is likely years away, but the days following the election are the time to start reducing deficit spending.
The first step is for leaders in Congress on both sides of the political aisle to reach an agreement on raising the debt ceiling long before the countdown to a financial meltdown is constantly broadcast on all the 24-hour cable news networks. Congress must also reach a swift consensus to keep the tax cuts intact until the economy is more stable.
The spending cuts need to be targeted. Congress should delay the cuts for a short time so a long-term spending reduction plan can be developed.
The ends of the war in Iraq and Afghanistan should free up some cash for deficit reduction.
No, getting this runaway spending under control won’t be easy.
But it will be easier to do with a healthy economy than in the midst of a recession (or depression) essentially created by political brinkmanship.