Monday, December 5, 2011

Time for Congress to step up on debt

From Judd Gregg at The Hill:

There are defining events in all nations’ progressions. Often they are violent, such as the Battle of Britain or our own Civil War or the French Revolution. Sometimes they are just things that happen without death and destruction, such as the Smoot-Hawley trade bill which was the accelerant of the Great Depression, or the massive inflation of the Weimar Republic that led to the rise of Adolf Hitler.
When people point back in history 20 years from now, looking for the causes that led the United States into a period of economic decline and a significant erosion in our standard of living, the example most given will be the failure of President Obama and Congress to make the supercommittee work.
We are now functioning under a government on autopilot, leaderless but not without direction as the autopilot follows its very distinct course. The growth of the government and the advancing of the march of debt and deficits are locked in. The path is one where deficits will average $1 trillion for years to come, where the government as a percent of GDP will grow to European scale and where the debt will soon be a burden that will lead to some type of fiscal calamity, most likely hyperinflation and a seizing-up of our ability to sell our debt at a reasonable price.

How does this autopilot get turned off?
It is clear after the crash of the supercommittee and the disappearance of the president to Bali that the course is not going to be adjusted by those leaders who are supposedly elected and paid to make rational policy and avoid such things as the meltdown of our nation’s future prosperity.
There is, of course, the Federal Reserve, but it too is becoming timid in the face of what is now a bipartisan bashing of its independence. It seems that for many elected personages it is a free shot to beat up on the Fed as a conspiratorial group dedicated to manipulating the lives of Americans in a manner that has caused most of the fiscal problems in our society.
This allows such personages to avoid looking in the mirror to assess blame. Thus, the Federal Reserve becomes cautious for fear that taking assertive action might lead to Congress actually doing a de facto takeover of the printing presses through “oversight.”
This leaves us with the people. There’s not a whole lot of hope there, given the tendency to demand more in services, especially when it affects you, than the country can afford. It’s hard to do the right thing if it means slowing the flow from the entitlement spigots.
Thus we must return to Congress.
Maybe it is time for the 37 senators and 100 House members who signed the important and thoughtful letters calling on the supercommittee to go for a big deal to step forward and turn off the autopilot.
That is a significant number of members of Congress. It is, for all intents and purposes, a working majority. They should consider convening as a group. They should probably do this in Philadelphia at Independence Hall to re-enforce the seriousness of their effort and the threat to the nation.

They should agree that they will not leave until they have reached an agreement that reduces the deficits and debt over the next 10 years by at least $4.5 trillion, because that is what is required to put our debt to gross domestic product ratio at a responsible and survivable level.
They should not call themselves Republicans or Democrats or organize as such but instead call themselves “Elected Representatives of a Free People and Great Nation” or the “Founders’ Movement.”
They should deliver on the true hopes that Americans have for their government, which is that it will protect them from avoidable chaos and pass on to our children a more prosperous and safer nation. It is their job. It is time for some rational people to take charge and do it. The names are already there on the letters. Now let’s ask them to follow through on their language with action that will give our people confidence in our nation.
Judd Gregg is a former governor and three-term senator from New Hampshire who served as chairman and ranking member of the Senate Budget Committee and as ranking member of the Senate Appropriations subcommittee on Foreign Operations. He also is an international adviser to Goldman Sachs.

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