Political analysts, financial experts and news commentators have come up with a handful of reasons for last week’s disastrous declines on Wall Street, but I place the blame squarely on the shoulders of a Congress that has lost sight of its reasons for existence.
President Obama, Republicans and Democrats delayed compromising on the national debt ceiling because they were more concerned about their own political futures. Refusing to do what’s best for this country early in the negotiations made all of them almost totally ineffective.
Members of Congress who are closely linked to the tea party had tremendous influence on the national debt deal that was struck at the bewitching hour. However, even they refused to support it in the end.
Americans were so fed up with the disgusting delays in cutting a deal they want to clean house in Washington, D.C. Unfortunately, it isn’t likely to happen.
Why, you ask. It’s because of that old saw about everyone hating Congress but loving his own congressman.
Take our congressman here in Lake Charles, for example. I happen to think U.S. Rep. Charles Boustany, R-Lafayette, voted right when he supported the last-minute debt compromise. And the odds are other folks feel the same way about their congressman, however he or she may have voted.
So how can we clean house?
Can’t stop debt
You can understand why people aren’t happy about the compromise. Most feel it doesn’t go far enough. No matter how much federal spending is eventually cut, the national debt is going to continue to climb.
Getting a straight answer is difficult. However, it appears cutting spending by $2 trillion over the next decade means the national debt will climb by only $8 trillion instead of $10 trillion during that same 10- year period.
It’s like credit cards for those who can’t control their individual spending. The principal only gets chipped away because most of the payments are going to pay the interest on the debt.
Citizens can say all they want about government spending, and it is too reckless. But you can’t make any serious cuts unless you make some changes in Social Security, Medicare and Medicaid. And that is virtually impossible.
Republicans don’t like to cut military spending, but when given a choice they pick that alternative rather than make cuts in the other three programs. You can see why, because the mere mention of cutting Social Security, Medicare or Medicaid brings howls of rage from the people who benefit from those programs.
The GOP had a budget plan that cut Medicare, and the party is trying to figure out how to handle the backlash that has erupted.
Democrats, as you would expect, plan to make hay out of that development.
I ran across a great graphic the other day produced by The New York Times. It explains how the country’s $14.3 trillion debt got so high and outlines who is holding our nation’s IOUs.
Before Ronald Reagan took office in 1980, the national debt was $1 trillion. Because of peacetime defense spending and permanent tax cuts, the debt climbed by $1.9 trillion during Reagan’s two terms.
The first Gulf War explains why the debt climbed another $1.5 trillion during the one term of former President George H.W. Bush. It grew another $1.4 trillion during Bill Clinton’s two terms.
George W. Bush was in office eight years, and he holds the trophy for the largest increase, $6.1 trillion. That was caused by tax cuts, the wars in Iraq and Afghanistan, an economic downturn and the 2007 recession.
President Obama has been in office nearly three years, and the debt has risen another $2.4 trillion. That is because of stimulus spending, tax cuts and the effects of the recession. (Editor’s Note: The debt has actually increased from $10.7 trillion at Obama’s inauguration to $14.6 trillion now; an increase of $3.9 trillion on his watch, with an additional $2.4 trillion increase built in due to last week’s debt deal – meaning in four years he will have added $6.3 trillion in four years.)
As you can see, all of our modern-day presidents share some of the blame for our mounting debt.
Most folks are surprised when you tell them over two-thirds ($9.8 trillion, or 68.5 percent) of the $14.3 trillion national debt is held by individuals and institutions in this country and by Social Security.
The remaining $4.5 trillion (31.5 percent) is held by foreign countries. Mainland China holds the biggest chunk of that total, $1.2 trillion, or 26 percent. Japan holds 20 percent of the $4.5 trillion.
Voters don’t like deal
A USA Today/Gallup Poll taken hours after the Senate approved the debt ceiling deal showed 46 percent of those surveyed disapprove of the agreement. Only 39 percent approved. And only 1 in 5 believe it addresses the federal debt.
The deal immediately cuts spending by $900 billion over 10 years. It creates a special committee to figure out by Thanksgiving how to cut another $1.5 trillion over the next decade. If it doesn’t come up with a plan, the cuts would be automatic.
A majority of Americans wanted Congress to cut spending and end some of the Bush tax cuts for the wealthy. It didn’t happen, and our sagging economy has ended up heading farther south.
Adding salt to our wounds was advice The New York Times said we got Saturday from China. The largest foreign holder of U.S. debt told Washington it needed to “cure its addiction to debts” and “live within its means.”
Isn’t that what many Americans have been telling the president and members of Congress for a long, long time?
Jim Beam, the retired editor of the Lake Charles American Press, has covered people and politics for more than five decades. Contact him at 494-4025 or [email protected].