Thursday, July 1, 2010

National Debt Crisis Is Not Going Away

This article in USA Today makes for some humbling reading. In spite of all the other, seemingly more immediate problems- the BP oil spill, the campaign in Afghanistan, continuing high unemployment- the massive federal deficit and the resulting gargantuan national debt continue to spiral out of the control, and this problem is going to get worse before it gets better.

President Obama's approach to the problem has so far been mostly symbolic. He has been bringing it up in his speeches more often. A few months ago, he appointed a high-profile special commission to study the debt and expects it to report back in December. In and of itself, that's fine, but it also gives the President cover to avoid taking serious measures on the problem right away. The Republicans have been ramping up their attacks on the President over the debt issue, which is also fine, but it overlooks the fact that they themselves, when in power, took a large federal budget surplus and transformed it into a massive debt. On this issue, neither the Republicans nor the Democrats have any credibility.

The problem will only get worse. As more and more Baby Boomers retire, the annual costs of Social Security, Medicare, and other legislatively-mandated programs is going to go through the roof, and massive cuts in spending or massive increases in taxes (or worse, both) will be necessary to meet these fiscal demands. This undeniable fact is bearing down on us like a freight train, but both Republicans and Democrats have their heads in the sand, pretending that the problem doesn't exist.

President Obama says that he wants to reduce the deficit "in a way that doesn't hurt the economy and doesn't hurt ordinary people." This might be an admirable sentiment, but it completely misses the point. The massive deficit and debt will require a fundamental transformation in the relationship between the federal government, the states, and the citizens of the country. We are going to have to go back to the ideals of Jefferson, where the federal government was simply not much of a presence in the lives of ordinary people. To the extent necessary, state and local governments will have to take over much of the role currently filled by the federal government, and many large departments of the federal government are simply going to have to be abolished, for there will simply not be enough money to run them.

But the most important fact is that ordinary people are going to have to regain the attitude of their ancestors, and restore the principle of self-sufficiency in their lives. The world is far too complex for us to go back entirely to the ways of the late 18th and early 19th Centuries, and one would be foolish to believe, as the modern Libertarian Party apparently does, that we can do without government altogether. But the undeniable fact is that government is going to have to be massively scaled back, and the sooner we get to grips with this fact, the better.

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