federal deficit

by

Over the Bluff

When President Obama shelved the recommendations of the Simpson-Bowles Commission, he made the biggest mistake of his first term.

He had commissioned this bi-partisan group to solve the problem of the federal deficit and assigned two statesmen of a bygone era, Alan Simpson and Erskine Bowles, to chair it. They proposed a blend of cuts and revenue increases, which would have been the last reasonable suggestion for balancing the budget Congress considered in the present administration.

Why did the President back away their proposals? Perhaps the cuts were too severe for liberal Democrats or endangered the implementation of the Affordable Health Care Act. Regardless, they represented the last true compromise, the last stab at a “Grand Bargain,” which could have separated the sheep from the goats in Congress.

Now both the sheep and the goats are headed toward the “fiscal cliff,” the automatic expiration of the Bush tax cuts and the draconian budget cuts scheduled for 2013. Writing in the New York Times on Sunday, Bill Keller suggested that the President should dare the squabbling herd to stampede off the fiscal cliff and let the consequences be damned. Apparently Erskine Bowles, co-framer of the last Grand Bargain, has recommended this course to press Congress to action.

This sounds like the right tactic for a Congress so tied up in its principles that it can’t move north, south, east or west.  Call their bluff and see if they’ll let their financial principles carry them over the fiscal bluff.  I’d buy a ticket to that show.

An even better show would be to make the Grand Bargain a campaign issue.  Make the candidates show their hands and threaten to take Congress to the brink. No more finger wagging about what should happen with the federal budget, but honest proposals about what could happen if Congress took its job seriously.

Put the Erskine-Bowles Commission’s recommendations on the table, as a symbol of compromise, and let the candidates explain their resistance. This is President Obama’s final chance to show economic leadership with a recalcitrant Congress.  Dare those posers to do nothing, to say nothing. Make this presidential campaign about the virtues of compromise and action, instead of posturing and resistance.

Tell Congress to get over the bluffing or head over the bluff with banners held high.

by

On the Rocking Horse

There is an insidious whisper throughout the land, “There must be more money! There must be more money!” I heard the voice in my own house growing up in the 1960’s, I heard it during the 1970’s when inflation was devouring our hard-earned salaries, and during the 1990’s when the Japanese seemed to be sucking the profits out of the world market. The words reverberate today as populists equate the stagnation of the U.S. economy with the size of the federal government.

D. H. Lawrence had it right when he said the words “There must be more money” are never uttered out loud, but “The whisper was everywhere and therefore no one ever spoke it.” In his classic fable of modern materialism “The Rocking Horse Winner,” Lawrence described a British family that was once wealthy, but now had only property and servants. The mother despaired that they “had no luck.

Paul, the young son, was beset by the voices and devised a plan to silence them. He learned to pick winners in the horse races and found adults who would place bets for him. He rode his rocking horse furiously until the names of the winning horses came to him, as by revelation. The money he won was delivered to his mother anonymously, and, just as magically, silenced the voices.
When I read this story in high school, I saw myself as Paul, and I vowed I would grow up to found a family where those voices would be mute. I have been fortunate enough to keep the clamor at bay, but the whispering sometimes returns with the strangulation of the national economy. And today the national whispering is incessant and, oddly enough, it comes from those who already have money. Apparently having money is not the cure for wanting money.
Because the Lawrence fable is not about the rescuing of the family by the genius of a young boy. It is about how, when the money was spent, the whispering returned with even more urgency, driving Paul back to his rocking horse again and again, until he died from the exhaustion of “trying to find luck.” His uncle’s grief-stricken words end the story: “But poor devil, poor devil, he’s best gone out of a life where he rides his rocking horse to find a winner.”
The struggling middle class of the 21st century is Paul. They are making more money and gaining less satisfaction from it than ever in our history. Much of the money pays for necessary medical care, much for tuition for the required college education, much for a retirement that recedes later and later in the life cycle. None of this is optional, but it maintains a quality of life that our grandparents did not enjoy. We have relative prosperity, but we are struggling to maintain it.
Paul’s mother represents those for whom medical care, college tuition, and retirement pensions are not a concern. Oh yes, we all share these concerns, but some have investments, not loans, to pay for them. Some don’t have mortgages and some pay for their cars and their children’s cars with cash. And still “There must be more money!”
The truth of “The Rocking Horse Winner” is that both the rich and the poor are beset by the voices. We all want more and work relentlessly to get it. There is no such thing as “enough.” The recent excesses of Wall Street prove that there are no limits to “enough.” We are always poor, always riding to “find luck.”
But there is no denying that some play the part of Paul and some play his mother, who inadvertently kills him. That is the tragedy of the story. The mother loved her son, and never wished him harm, but she was driven by the voices.
What constitutes “enough”? It can never be the same for every family. Even $250,000 may not be a fair dividing line between the “haves” and the “have-nots.” But it is true that some of us are on the rocking horse and some are driving the rest of us to oblivion by our relentless pursuit of “luck.” The sly scape-goating of the spending of the federal government can not obscure the truth that some are benefiting from the subsistence living of others.

By the world’s standards, the vast majority of Americans are not poor or struggling to survive, but many are on the rocking horse of debt and diminished dreams.  They work hard or pursue honest labor without gratification. Meanwhile their labor supports the industries, which enrich those who administer them.

Programs that benefit the “rocking horse winners” of society should not be cut back in the name of “fiscal responsibility.” “Fiscal responsibility” is code for “Holding onto our wealth.”  Those who benefit disproportionately by the free market, such as oil producers and drug manufacturers, insist they are entitled to their winnings.  Whereas those on the rocking horse are not “entitled,” they are a drain on our federal budget.

Inadvertently or not Paul’s mother is driving Paul to his death. So it is for those who live on cash against those who live on loans.  We must shut down the frantic demand, “There must be more money,” and let the working and unemployed poor get off the rocking horse.