published Saturday, September 28th, 2013

Wamp: Finding common ground on generational debt

By Weston Wamp

While the gamesmanship on display in Washington over funding the government does not leave much room for statesmanship as we approach another depressing debt ceiling debate, common ground does exist on the generational issue of our catastrophic public debt. And we should do everything possible to encourage Congress to go find it.

Before his own programs and initiatives were jeopardized by proposed budget cuts, even President Obama struck a magnanimous tone when speaking about the debt crisis as a Senator in 2006. "Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren," he said. "America has a debt and a failure of leadership. Americans deserve better. I therefore intend to oppose the effort to increase America's debt limit."

The point is not that President Obama is a hypocrite, everyone in Washington could be cast as a hypocrite if we held them to everything they said seven years ago. The same is probably true of all us, if we are honest. The point is, despite his actions in the White House, we know that President Obama has seen the light in the past. He has already taken the most critical step toward ending an addiction, admitting there is a problem.

The addiction for federal legislators in both parties is using the credit of young Americans to avoid difficult choices year after year. The debt incurred on behalf of America's youth allows Washington to continue with patchwork solutions, but little, if any, reform. When President Obama visited Chattanooga in late July he went so far as to brag about the deficit shrinking at record pace. Of course, that claim is only possible because it got so out of control in the first place.

If Democrats and Republicans are genuine in saying they both fear for their children and grandchildren's future in a debt-ridden nation, seeking out common ground on how to reduce a $4 trillion federal budget should be particularly appropriate at this opportune time to address reforms. Despite the habit of referring to every election as "the most important election of our lifetime" it does not appear that next year's mid-term elections will even change the makeup of Congress, let alone go down in history as the most important. Republicans will likely retain the House, Democrats appear confident they will hold a slim majority in the Senate and the President will be in office for three more years.

In the meantime we should do something good for country. And forget about who gets the credit.

Unlike the Congress, the Congressional Budget Office (CBO) regularly considers the longterm impact of today's policy. The current CBO budget projections give us a glimpse of what life will be like in 2038, while Congress struggles to find enough consensus to pass a budget for next year. Thankfully the CBO provides this sober analysis of our dire budget situation, giving us the context to sift through the political antics of both parties. Today, that context paints an irrefutably discouraging picture of what the scope of the federal deficit will be when I am 51 years old, in 2038. Runaway entitlement spending coupled with an antiquated tax code are anticipated to swell the federal deficit from 73 percent of GDP, where it currently sits, to 190 percent in 2038. For perspective, the debt of much-maligned Greece is currently 160 percent of its GDP.

That is enough to tell me we need a 25-year plan from Congress that outlines how we can avoid the scenario the CBO projects. If that means young Americans should expect only 80 percent of the Social Security benefits our parents will receive, just tell us. We would appreciate the forthrightness. If long-term planning reveals means testing will be necessary within Medicare for affluent millennials, just go ahead and give us a heads up. And if a simplified tax code could lower rates, but eliminate loopholes while providing more revenue to offset our deficit, most young Americans are going to agree that is a no-brainer.

On the issue of our national debt, young Americans literally cannot afford for the Congress to cling to its partisan approach. We have to solve this together, which means we have to start talking about it together. Each time Congress raises the debt ceiling, we are faced with the grim reality that this generation of political leaders is taking from the next generation in order to pay for today's excesses. How many times do we have to go through this before we make America's posterity the priority?

Weston Wamp is director of communications for the Lamp Post Group.

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nucanuck said...

Well isn't that nice.

Young Weston thinks that we should all agree to cut social programs, reduce taxes (fewer loopholes), and develop a 25 year program to balance the budget. Would you like some apple pie with that?

Here's a news flash for you Weston. We don't have 25 years, we don't even have 25 months. In all likelihood, we have already gone over the cliff and we are now trying to figure out how we are going to fare in a crash landing. This isn't new news, most everybody knows a foul wind is blowing. Instead of your kumbaya we need a disaster plan and we need it quickly.

On our current spending path, the dollar will soon swoon and that will collapse the economy. If we cut spending in any significant way, that too will collapse the economy. That's why the Fed backed off tapering, even a little. We are trapped and we don't have much time to figure out what to do. All odds favor the government and the Fed continuing and increasing the spending. We know that.

So what does collapse the economy mean? Guesswork is all we have, but we should assume that unemployment would spike to something near 25%, maybe more; that credit would be widely unavailable; that banks would go wobbly very early on; that business closures and home foreclosures would become commonplace. We should expect to see families moving in together, people renting rooms instead of apartments, vegetable gardens becoming commonplace, and miles driven to plummet. We will re-examine how we spend what little money we have, cut each others hair, forget about vacations, and get creative. Most of us won't starve, but we might take off a few pounds and we might learn to work together...and like it.

Our banks could be nationalized, re-capitalized and then re-privatized as was done in Sweden not so long ago. There could be some sort of a debt jubilee or forgiveness. Whatever happens, foreign credit and globalization is likely to come to a standstill and that might turn out to be a good thing...after some pain.

The pension money that remains won't buy much because the dollar will have been inflated to a low value. The big banks will finally get split up into small banks and all the crazy banking practices of recent years will face a firing squad. Most government programs will simply stop. The military and security systems will be cut back by huge amounts. Monopoly businesses will be broken up. The tax structure will be simplified and balanced so a middle class will have a chance to re-appear. Getting rich will take longer and getting mega rich will become rare.

Unfortunately Weston, you are young and ill-prepared for what is coming and are unlikely to be one to help America work through this difficult period. America is going to need wise leaders, not young ambitious wannabes. (Communications might be a bit lean as well. (Just sayin.)

September 28, 2013 at 1:33 a.m.
daytonsdarwin said...

Net time, TFP, just leave the column blank and save your ink and time.

The empty space and Wamp's political drivel have the same value.

September 28, 2013 at 9:38 a.m.
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