Three Cheers for the National Commission on Fiscal Responsibility!

By John Lumbard.

  The President’s Commission on Fiscal Responsibility will release its findings on December 1, but recently the two chairmen–Republican Alan Simpson and Democrat Erskine Bowles—took the extraordinary step of releasing a “draft” of the “Co-Chair’s proposal”.  It’s an end-run around the dissenting voices in the commission, and a clear statement that there WILL be a strong proposal that addresses our problems head on.  They even included a 21%-of-GDP limit on federal spending, and three options for tax reform—which could release literally millions of paper pushers from unproductive jobs to useful occupations such as the production of food, clothing, housing, automobiles, and computers.

The proposals were immediately met with criticism from the traditional fiscal-irresponsibility allies of the far right and the far left, who have always opposed balanced budgets because they imply lower spending and higher taxes.  This pro-deficit lobby, The Wing Nuts, has significant political power.  It will take all the President’s political capital, as well as the Voice of the People, to get the ultimate proposal passed even in a lame-duck session.

We’re optimistic, but let’s not fool ouselves into thinking that this is a long-term fix.   Congressmen will still be incentivized, powerfully, to behave badly, and the Wing Nut Lobby will work tirelessly to pile debt onto the backs of little children.  Whatever the outcome, we will still need constitutional amendments to keep the budget balanced in the future.  Even the Commission’s 21%-of-GDP limit on federal spending, if passed, will just be another piece of paper in the Library of Congress if it’s no more than a “joint resolution”.

Write to your local newspaper and tell your friends, because we’re all—right now—standing at the crossroads of history.  The number of government beneficiaries is growing all the time, overwhelming the voices of fiscal restraint.  Our debt is growing, and our creditors are becoming impatient.  If we don’t have the will to fix this problem now we’ll soon find ourselves in the postion that Greece was in a few months ago;  and no nation is large enough to rescue us from ourselves.

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