All the news reports today are that the “super” committee of congress, assigned the task of reducing the federal debt, is dead-locked, and in all likelihood will fail to reach agreement on how to reduce our national debt.
To which I say: “bully”. This was a stupid idea to begin with, one that used an especially complicated procedure to address a minor issue, at a time when we as a country had much bigger problems to deal with.
Much has already been written about the failure of the “super” committee, and much more will no doubt show up on an op-ed page near your in the coming days. Like the elephant examined by six blind men, there are many different aspects to this story. But I only want to present three points about this today.
1) The federal debt is NOT the biggest problem facing America today. It is not even the biggest economic problem facing America today. The biggest problem facing America today is the high numbers of Americans unemployed and under-employed Some Occupiers will argue that economic inequality in America is the biggest problem we face today, and I will not argue the point, because to me, unemployment/under-employment and economic inequality are sides of the same coin. Either way, everyone acknowledges that extra-ordinary measures were taken to create a “super” committee, despite the fact that the issue to be addressed is NOT a top-tier problem facing us today. And what steps have been taken by congress to address unemployment/under-employment, the top-tier problem facing our country today? Nothing, nada, nichts, zilch, ix-nay, rien, nitchevo.
2) Paradoxically, if one was interested in substantially reducing the federal debt for the long-term, the most effective and long-lasting correction is achieved by returning Americans to full employment. There is no debate on this. This strategy for reducing the federal debt is agreed by top economists on both the left and the right. And strangely, even though they were tasked with coming up with ways to reduce the federal debt, the “super” committee never got around to considering increasing employment as the sure-fire way to reduce the federal debt that all economists agree that it is. The “super” committee looked at cuts in spending, and ways to increase tax revenues, but never looked at putting Americans in secure jobs.
3) With the failure of the “super” committee to come up with actual legislation, automatic budget cuts will go into effect, beginning in 2013. Under the rules that created the “super” committee and dictate what is to happen absent actual legislation, the spending cuts will occur with rough parity across all discretionary parts of the federal budget. That means on Headstart programs and on military spending. And those cuts are deep as well; the largest cuts to the American military that have occurred in a generation. This is a big problem for many members of congress. And so, beginning next week, congress will go into overdrive to create legislation to spare the military from facing those mandated reductions in funding. Yes, the congress will now move heaven and earth in an effort to prevent funding cuts to the military budget, and thereby STOP a potential reduction in the federal debt. And to think, it was only three months ago that congress was jumping through hoops in order to create an extra-ordinary process by which to reduce the federal debt.
So, what's the “take-home” message? Reducing the federal debt is NOT the biggest problem we have in America today; the “super” committee NEVER considered implementing the most effective and long-lasting strategy to correcting the federal debt; and now congress will go to extra-ordinary lengths in order to prevent a meaningful reduction in the federal debt. To ordinary Americans, all this suggests that congress never conceived of the federal debt is really a problem to begin with, and no one in congress is actually interested in reducing the federal debt.
So why have Americans been treated over the past year to the long parade of very important people in and out of congress telling us that we must reduce the federal debt? The federal debt is large and this is indeed a problem, but not one requiring the formation of new rules and procedures for the immediate atention of congress. The fact of the matter is, conservative “deficit-hawks” are less concerned about deficit spending and debts, and more concerned with removing social “safety-net” programs that largely benefit the middle and lower classes, the better to increase the transfer of wealth from the have-nots to the wealthy and corporate interests that are the true constituency of congress. Rightly so, members of congress are uncomfortable telling the American people they want to cut funding for Social Security and Medicare/Medicaid programs. So instead, what they tell the American people is that the federal debt is a dangerous problem that needs immediate and serious attention, and everyone should be willing to give up something. And then when it comes time to take action, magically the only actions under consideration are cuts to SS and Medicare/Medicaid.
And if you need any proof of this legislative reality, consider the rise and fall of the “super” committee.