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National debt not greatest challenge facing the country

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• Employment and economy are bigger problems than the deficit. • Healthy economy will improve deficit situation. • America faced economic crises in early days—and solved them.

“…that if everyone retains inflexibly his present opinion, there will be no bill passed at all for funding the public debts, and …without funding there is an end of the government.”

 

That is as accurate an account of the intractable nature of the U.S. Congress’ current position on fiscal matters as I have read anywhere. Inflexible positions means no one is willing to compromise; no one is willing to admit that someone else might have an idea worth considering; and no one can fathom that another legislator might have a solution to the quagmire that seems constantly to bog down Congressional action.

It was written in 1790 by Thomas Jefferson during a time when the country faced a real financial crisis, a crisis that threatened not just a bit of financial hardship, not just some inconvenience for the stock market or some discomfort for legislators who were vying for power in the new republic, but a crisis that threatened the stability, possibly even the survival, of the United States of America.

I read that line, among others that seem almost as pertinent today as they did in the early years of our democracy, in a new biography of Jefferson, Thomas Jefferson The Art of Power, by Jon Meacham. I recommend it to anyone who has even the least interest in history and in the growing pains that came with creating what we now consider the greatest country on earth.

Jefferson, and others, feared that forces inside and outside the country favored a return to some form of hereditary leadership—a monarchy. He feared that Alexander Hamilton, Secretary of the Treasury, was one of these. Jefferson, at the time, was serving at the country’s first Secretary of State. He held strong beliefs. But he also understood and used the power of compromise. His ability to bring disparate opinions into, if not harmony at least acceptance, was crucial in gaining support for the Declaration of Independence, among many other actions taken by America’s early leaders.

We survived. We avoided that fiscal cliff, which was considerably steeper and significantly more hazardous than what we face today, and emerged—slowly, perhaps—into what we believe to be the leading nation of the free world.

We still face challenges, but economist Paul Krugman wrote in a recent column that America’s national debt is not the biggest challenge facing our country.  He wrote that the economy currently is not in great shape but not in terrible shape either.

“The budget deficit isn’t our biggest problem, by a long shot,” he wrote. “Furthermore, it’s a problem that is already, to a large degree, solved. The medium-term budget outlook isn’t great, but it’s not terrible either — and the long-term outlook gets much more attention than it should.”

He says the deficit is largely a factor of a depressed economy. “The deficit will come down as the economy recovers: Revenue will rise while some categories of spending, such as unemployment benefits, will fall. Indeed, that’s already happening. (And similar things are happening at the state and local levels — for example, California appears to be back in budget surplus.)

“Still, will economic recovery be enough to stabilize the fiscal outlook? The answer is, pretty much.”

Krugman says actions already taken are working and that spending cuts and tax hikes already in place will bring the budget deficit down even more.

He doesn’t indicate that the economy is as sound as it should be, only that it’s not as bad as some make it out to be.

“It’s time to focus on other stuff — like the still-depressed state of the economy and the still-terrible problem of long-term unemployment.”

He lashes out at the intractables, those who see only one solution to a complex problem and a problem that may not be as dire as some make it out to be.

Jefferson would have recommended some middle course, a compromise that would maintain the country’s ability to meet its obligations. Threatening to shut down the government would have been unthinkable.

 

Discuss this Blog Entry 3

Anonymous (not verified)
on Jan 25, 2013

Where you are sadly mistaken is the economy is depressed largely because of the large debt, as well as the new Health Care Law, resulting in lack of consumer confidence and limited credit availability. Krugman would have us spend ourselves into demise to meet his liberal socialist views. You need to read some Friedman.

big_huck (not verified)
on Jan 25, 2013

Oh my goodness. Meacham and Krugman! That's who you want to trot out for advice. Krugman said spending cuts and tax hikes in place will bring the budget deficit down even more. Budget deficits are caused by spending more than you bring in. Please don't tell me that you think we are undertaxed. Although I think some of the people not paying should pay. So if we aren't undertaxed then it must be a spending problem. I agree that there are tax hikes in place, but WHERE ARE THE SPENDING CUTS. Please refer me to the year where spending at the fed govt has gone down. Tax increases are always now, if not retroactive to some date in the past, and spending cuts are always in the future. You can't bind a future congress in that manner. You are putting your faith in morons that tell you "xyz agency's budget was slated to increase 12% next year but now it will decrease 5%. The increase is only 7%. Only in that cesspool known as DC is a 7% increase hearlded as a budget cut. Compromise was needed to put this republic together, but over 200 years of compromise has put us in the terrible shape that we find ourselves in. What happened to Presidents who received spending bills from congress and said ""I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on the objects of benevolence, the money of their constituents." This quote is from an economist, "Christmas is a time when kids tell Santa what they want and adults pay for it. Deficits are when adults tell the government what they want and their kids pay for it."

To say that Jefferson would recommend some middle course at this junction in history is laughable. I refer you to the Jefferson quote at the top of this article and ask you if he would be asking for compromise for this abomination we have. Jefferson, if found today would be advocating for revolution as he did against the British Crowne of the 1700's. That revolution was fought for a whole lot less than what's happening today. This article reeks of the same hypocrisy spouted by obama in his last inguaration speech. He tried tying the words of our Founding Fathers to his progressive march, all while leaning forward.

on Jan 25, 2013

Compromising is how we got in this mess. We need a real solution not a political solution.

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