It’s probably not news to anyone that our country faces some serious problems. However, members of Congress don’t seem to care enough to do anything but grandstand and argue. The U.S. government is running a $700 billion deficit this year, but the last time Congress sent a real budget to the President’s desk was 2002. That was 15 years ago! Since that time Federal spending has largely been on autopilot via a mechanism called a Continuing Resolution (“CR” in Washington-speak).
The role of Congress is to make laws and decide how tax revenues should be spent. Instead, they act as if they think their role is pretending to act as detectives. This is not a commentary solely on the current kerfluffle in Washington. As we noted, Congress has been abdicating its responsibility for 15 years. Our elected officials would rather posture in front of the cameras than actually do the jobs we sent them to Washington to do.
Brian S. Wesbury, Chief Economist at First Trust, commented:
At eight years, the current economic recovery is the third longest on record. Personal income, consumer spending, household assets, and net worth, are all at record highs. Stock markets are at record highs. Corporate profits are within striking distance of their all-time highs. Federal tax receipts are at record highs.
So, how is it possible that the federal budget, along with some state and local budgets, still look like they’re in the middle of a nasty recession?
The answer: Government fiscal management is completely out of control. Politicians find time to fret about Amazon’s purchase of Whole Foods and won’t stop bashing banks, but they’ve lost their ability to deal with their own fiscal reality.
… Illinois and the City of Chicago are running chronic deficits, while New Jersey and New York are fiscal basket cases.
Businesses and entrepreneurs create new things and build wealth. Politicians redistribute that wealth. And while some of what government does can help the economy, like providing defense or supporting property rights, the U.S. government has expanded well beyond that point. Politicians have never been this reckless or fiscally irresponsible.
Whenever we say this, people ask; “what would you cut from the budget?” And then, if you are actually brave enough to answer, you get attacked for “not caring.”
This needs to stop. Illinois is in a death spiral. Tax rate increases will chase more productive people out of the state, while ratchetting spending higher. And just like Detroit and Puerto Rico, the state will go bankrupt.
The U.S. government is on this path, but, because it has the ability to fund itself with the best debt in the world, a true fiscal day of reckoning is still 15-20 years away.
Government spending needs to be peeled back everywhere. It’s no longer a case of picking and choosing. And until that happens, the fiscal irresponsibility of the government is the number one threat to not only America, but the world.
No matter what politicians tell us, any pain caused by private sector greed will pale in comparison to the mayhem that collapsing governments can create. Just look at Venezuela or Greece! It’s time to reset America’s fiscal reality. And if that means debt ceiling brinksmanship, shutting down the government, or moving to a simple majority on spending decisions, so be it. It’s time to get serious!
We agree. We should all tell Congress that it’s time to get serious.