The oft-used phrase that was coined during past presidential elections in an attempt to signify a disconnect between candidates and the issues facing the nation (at the time .. and ironically again today) is painfully apropos today as Wall Street continues to stumble following Standard & Poor's downgrading of the debt of the U.S. federal government. In what has become a fairly standard, and rather hackneyed, response to the U.S.' continued economic troubles, Republican members of Congress trumpeted the need to rein-in government spending. That would be all well and good if a majority of government spending was made-up of 'discretionary' spending. However, it's not. And during a period of time when more-and-more Americans are being forced to seek-out government assistance of one kind or another, the already-proposed cuts to federal spending portends a rather dark period in our nation's not-too-distant future. If one wants to hazard a guess as to how things will turn-out, should Republicans get their way and marshal through Congress even more drastic spending cuts, just look to the growing unrest and rioting that is taking place in England. There is our "tomorrow" if we do not demand a halt to the ridiculous draconian cuts to federal government spending.
It would be a mistake for anyone to suggest that I believe cutting any spending is wrong. Despite some moderate "belt-tightening" that has taken place at the behest of President Obama, there remains areas in government spending where programs are duplicated, and where needless waste and inefficiency exist. Continued pressure to root-out those instances and ending them is entirely appropriate. However, in order to satisfy the need of some in Congress for even deeper cuts, it will mean slashing already-strained budgets at a variety of government agencies and departments. Like clean water? Enjoy going to the store and buying food that you can be relatively assured is not going to sicken or kill you? Appreciate being able to drive on roads that don't threaten to rip the undercarriage of your vehicle out from under your driver's seat? Too bad! Because if the types of cuts Republicans would like to enact see the light of day, you won't be able to count on any of those things (and many others) that we've for so long taken for granted.
One of the most important lessons members of Congress needs to learn from the debt downgrade is that attempting to balance the federal government's budget purely via cutting federal spending is neither reasonable nor rational. It is going to take additional revenue to get the federal government's budget back under-control; period. Don't like that? Too bad! It is time to wake-up, smell the coffee, put down that bong or whatever illegal substance that some members of Congress have obviously been partaking up to this point, and get the message; increased revenues, along with moderate belt-tightening by the federal government is the only way to solve the government debt issue. Standard & Poor's telegraphed the possibility of additional downgrades of federal debt should Congress fail to adopt a more sensible fiscal policy. And the fact that S&P's most recent downgrade came immediately on the heels of the Republican-led, Republican-caused and Republican-owned hubbub over raising the federal debt limit, which included nearly a trillion dollars in spending cuts over the next ten years (and NO revenue increases) should be a big ol' wake-up call to those members of Congress that their proposed "solutions" are not want those in the debt-rating industry are looking for.
Why is that? Namely, because they too can see the writing on the wall. Our economy is faltering, even while we're in the midst of a relatively anemic recovery from "W's" recession. And yet, despite the fact that economic growth has stagnated, many of the largest corporations in the U.S. (and internationally) are sitting on huge sums of unproductive cash reserves. Fueled, in large-part, by the easy and cheap access to credit offered by the U.S. Federal Reserve and the laundry list of tax breaks, reductions and removals that have thus far been enacted in an attempt to jumpstart America's economic engine. And one of the most sure-fired ways of causing an increase in tax revenues for the federal government is by way of improved economic performance by the nation as-a-whole. Additionally, while those corporations are sitting on their large sums of cash, they've been allowed, again as a result of changes in tax policy in past and the current administrations to pay paltry percentages of those funds in the way of taxes.
At this point in the game that is America's economy, we are in sad need of some significant growth in economic output. Corporate America, despite their having the funds available with which they could spark increased and improved economic growth, has instead chosen to hold the American economy hostage, in exchange for a President that they believe would be more business-friendly. So ... if the "free market" is not able or willing to spur economic growth, we only have the federal government left to turn-to. Like it or not, this nation needs ... no, REQUIRES ... another economic stimulus. Just about every noted and notable economist believed that the first stimulus of the Obama Administration was not nearly large enough. And now we are reaping what was sown. Unfortunately, not enough was sowed ... so our reaping is a bit grim.
I have no doubt that if anyone should have the temerity (although I would liken it more to having courage) to suggest another stimulus, Republican and Tea Party members of Congress will portray it as Armaggedon. What they fail to realize, understand or appreciate is that if our economy is not able to experience even moderate growth in the very near future, the country we will be living in come the 2012 presidential elections is going to look much different than it does today. And I am fairly confident that between now and then, the American people will become well-acquainted with the destructive policies and programs that Republicans have thus far managed to foist onto the American people.
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