This is a long piece, but bear with me. This is a topic that could define our next political era.
One revelation resulting from the fiscal cliff talks and agreement appears to be that President Obama and the Democrats will not support any meaningful debt relief or effort to balance America’s books during President Obama’s second term. It appears the Democrat Party has completely decoupled the idea that government expenditures are in any way tied to government income. Obviously, there are a few Democrats who believe in balanced budgets, but they are mostly outside the Administration, were elected to office years ago or are in academia. Today’s Democrats are comfortable with the new reality that the government is the borrower, the lender, and the money printer in one closed loop. I guess the good news is that we are no longer as desperate for the Chinese to buy our debt.
Another point made clear during the fiscal cliff talks and the subsequent agreement is that today’s Democrats want to raise taxes, not for economic reasons or as a sincere effort to pay down our debt and encourage a healthy economy, but as a way to achieve their perception of equality, social justice and fairness. Obama first hinted at this when he was caught on camera in the 2008 campaign telling Joe the Plumber, “when you spread the wealth around, it’s good for everybody.”
It’s been underreported, but Stephen Moore’s article in the Wall Street Journal Sunday brought to light comments that President Obama made to Speaker Boehner during the most recent fiscal cliff negotiations. Obama couldn’t have been plainer when he reportedly said, “We don’t have a spending problem” - much to the disbelief of the Speaker. If Obama doesn’t believe we have a spending problem, he clearly does not feel a sense of urgency to deal seriously with our current dire fiscal situation.
The signs are all there – shown in Chris Cillizza’s piece, “Are ‘grand bargains’ still possible?”, Bob Woodward’s latest book, “The Price of Politics,” and Obama’s own failed budgets – that there is no real desire among Democrats to pay down the debt or balance the books.
Chris Cillizza outlines why he believes bipartisan agreements on a large scale are almost impossible in today’s political climate, pointing to a lack of leadership, polarization, and the toxicity of compromise for political primaries. To add another reason to the mix, President Obama and the Democrats simply do not want to curtail spending. The reason the Democrats have arrived at this point is so obvious that perhaps it’s been hard to see. The recipients of our debt proceeds are largely Democratic voters. If readers don’t agree, I invite you to send in comments or analysis that suggests otherwise.
In reading Bob Woodward’s book, it’s easy to see that the objection Obama has to fiscal reform is that he doesn’t want there to be less debt if that would mean telling his voters that the check is not in the mail. During the fiscal cliff negotiations, according to Woodward, Obama used his strong poll numbers to engage in arrogant posturing, alienating GOP leaders who were prepared to negotiate.
Until we can find a way to deal seriously with our debt, it will continue to grown exponentially, leaving unsustainable debt for our children to pay. To place the debt in more relatable terms — following up on an illustration on Meet the Press Sunday that showed what would happen if the federal government budgeted like a family — our current revenue to spending ratio would be the same as a family with a yearly income of $96,000 spending $152,000 in a year, thereby adding $56,000 in debt to their credit card – a credit card that already has an outstanding balance of $656,000.
Hopefully, the political debate will arrive at an honest place and the Democrats won’t be allowed to pretend they want to arrive at a balanced budget or do anything that curtails government spending. Voters need to decide whether or not the debt has consequences. And allow me to roll out one more time the controversial quote frequently attributed to Alexis de Tocqueville, “A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury.” Absent another war, this idea will shake our political debate and our political culture for at least the next decade.