Wednesday, June 1, 2011

Time to Fix the Economy: The Debt Limit and Spending

Yesterday's vote on raising the debt limit was, as expected, voted down by the vast majority of the House of Representatives.  While Democrats, including Minority Whip Steny Hoyer (who voted against the bill), are hurling accusations of political theatre, the rejection of the "clean debt limit vote" was appropriate.  The message sent is unequivocal:  America cannot continue to spend beyond its means.  Cuts are needed and any increased ability to spend must be countered by reduced expenditures.

In a sense the Democrats are right.  This vote was not really about the debt limit.  Speaker of the House John Boehner (R-OH), said it clearly “It’s true that allowing America to default would be irresponsible....”  However, default is certainly not an issue, at least at this point.  Instead, the vote was much more about changing the prevailing economic discourse in this country, where for far too long it has been easy to spend beyond our means and push off the consequences.  It is necessary and laudable for Congress to stand its ground and show that there really is no such thing (anymore) as "easy money".

The debt limit may ultimately need to be raised (a default would be catastrophic), but not without meaningful reassessment of the government's fiscal condition.  We are, as a nation, spending far too much.  Former Republican governor of Utah and possible presidential candidate, John Huntsman eloquently articulated the need to reevaluate our economic position, in what can fairly be described as a campaign speech in today's Wall Street Journal.

Amongst other points, Huntsman argued that the debt level must be cut while difficult choices need to be made regarding Medicare, Social Security and other government expenditures including agricultural subsidies.  Even Sarah Palin has jumped in the fray, smartly calling for an end to all energy subsidies.

Boehner is taking this message directly to the president, in a meeting scheduled for today, where he and fellow GOP congressmen aim to push Obama to make deep spending cuts in order salvage the US's fiscal sanity.  Backed by a number of leading economists, Boehner argues that "“To help our economy grow and create jobs, any debt limit increase needs to be met with even larger spending cuts.”

The GOP and those 82 House Democrats that voted against raising the debt limit are right to stand firm.  America must realize that our situation is perilous and that it is time to adjust our system before it becomes too difficult.  Huntsman summed up the sentiment nicely "Some argue for half-measures, or for delaying the inevitable because the politics are too hard. But delay is a decision to let America decline. The longer we wait, the harder our choices become."

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