Call me old-fashioned, an old coot, or what have you…but in my mid-thirties, I feel like I have more in common with the thrifty realists of the Great Depression than I do with any adults around these days. Like the stalwart savers of that terrible time, I don’t think we can afford it.
By we, I mean all of us, individually and collectively. And by it, I mean everything: our annual budget deficits (400+ billion in fiscal 2009), our yawning national debt (9.4 trillion and growing), our gaping trade imbalances (700+ billion in 2007), and our massive unfunded mandates (two words: Social Insecurity).
Like millions of the sub-prime borrowers you’ve been reading about, the American government is drowning in a sea of its own devising.
On one hand, you’ve got “tax-and-spend” Democrats promising to fund every problem away. They’ve been out of power for a while now, but be forewarned: nothing makes for greater profligacy than a floundering economy in an election year.
On the other hand, you’ve got the “borrow-and-spend” Republicans. They’re worse. Spendthrift doesn’t begin to describe their behavior. In just two administrations, Ronald Reagan and George W. Bush, they’ve added more than six trillion dollars to our national debt. These guys think the solution to debt…is more debt.
But the worst part of all of this fiscal mismanagement is the example it sets for the American people.
If the best and brightest of us (and I use the phrase advisedly) can’t manage our collective financial affairs, how can the rest of us lumpen bourgeoisie be expected to do it individually? We are up to our eyeballs in flat screen TVs, iPods, SUVs, vacations, and five dollar half-gallons of milk.
How do we manage?
On credit, of course. Just like Uncle Sam.
Oh, it’s been a great party, hasn’t it? The good times have rolled for three straight decades now because there’s always been another chump willing to lend. Most recently, the Federal Reserve — meaning, you, the taxpayer — stepped up to bailout Wall Street. But what happens when the global lending waltz finally stops and America is left without a chair?
It’s too terrible to consider. But the recent default experiences of Russia and Argentina are instructive. The only difference is that an American default will be worse. Much worse. For everyone.
And this is what makes me say we can’t afford it. Because, well, we can’t. At least not without putting our entire future at risk.
We need to hearken back to a time when debt was a four letter word. A time when people saved their pennies, lived within their means, and steered well clear of the temptations of a consumer economy.
Yes, you’re probably saying, but won’t cutting back make things worse?
Better that it gets worse now, when we still are capable of a soft-landing, and a gradual reduction in our outsized standard of living, than when a sharp and dangerous austerity is thrust upon us.
So, right here, I’m throwing down the gauntlet.
I challenge the Federal Government to cut 10% from every budget in the next fiscal year. That’s right, every budget (including defense and Social Security – it’s called means testing), without exception.
I challenge the Federal Government to pass an amendment to the Constitution instituting pay/go laws that include an annual balanced budget.
I challenge the Federal Government to never, ever again raise our debt ceiling. What is the point of this law if you simply raise it every time we need more money?
Lastly, I challenge the American people to implement the same rules in their own home. If you live above your means, doing so will help you get you back on track. If you already live within your means, save the difference. This will help our economy.
Okay, enough. I know I sound like an old crank, a moral scold. But it’s time for this country to reset our economy. If we do, we will be able to afford it.
And by it, I mean the future.