By Garrett Vande Kamp |
If you watched the first presidential debate, I apologize. It was much less exciting that it could have been, especially if you watched the vice-presidential debate.
Perhaps the only interesting part of the debate came when the candidates were asked about spending cuts. Right out of the gate, Romney said that while he loved Big Bird, he would end subsidies to PBS. This sent the media into the frenzy, with people from all over the world writing their thoughts on every information hub imaginable.
Yet people have largely forgotten what the original question was about: spending cuts. There is a big problem in the United States: the federal government is running trillion dollar deficits every year and our current debt is above $16 trillion according to usdebtclock.org.
While politicians bicker about whether raising taxes is a solution, everyone agrees that spending cuts must happen. Yet no one can ever agree what to cut! Anytime any program is targeted, proponents use the same defenses to save their programs.
The first major defense of any program is that it is not that much money compared to the total national budget. Interest groups and government agencies, frantic to protect their funding, will try to say their funding is minuscule compared to the numbers.
This type of thinking creates a “sacred cow” mentality, where a single program becomes too important to even consider cutting. This phenomenon is well documented; it is very difficult to terminate a program, no matter how ineffective or unimportant it is, as determined by a study in the December 2009 edition of the Canadian Center for Science and Education’s Journal of Politics and Law. If nothing can be cut, there can be no way to solve the problem, and the problem continues.
The second defense of any program is the blame game. Proponents like to point fingers at other programs that are not worthy of federal money, or at least not as worthy as the program on the chopping block. Whether the finger points to entitlement programs, tax breaks, or the defense budget, the result is always the same.
Finger pointing inevitably causes divide; elected officials fight each other to please their base, thereby preventing solutions to the problems. This has consequences, as shown by the credit downgrade of 2011. For the first time in its history, Standard and Poor’s gave America a AA+ credit score, down from its perfect AAA status. The reasoning for this move was simple: political brinkmanship on behalf of public officials. I wish this was the only example. Unfortunately, the failure of the bipartisan debt commission shows otherwise.
The consequences of rising debt are real and devastating. According to an Atlantic report, government borrowing in the short term “crowds out” investment in private companies, causing interest rates to go up. This affects everyone, from rising home mortgage rates to fewer loans to small business. In the end, economic growth slows.
Over the longer-term, continued government borrowing causes people to lose faith in the dollar. Washington Post columnist Robert Samuelson suggests that as investors stop buying U.S. stocks and bonds, the stock market will crash. When consumer spending in the U.S. slows, this hesitancy spreads to those countries that rely on exports to the U.S.
This should sound familiar; the current recession had very similar problems. Luckily, the government was there to mitigate some of the damage. With continued deficit spending and a ballooning national debt, we may not be so lucky next time.
Should the government give Big Bird the boot? I am not sure. In a perfect world, we should probably keep funding PBS. But we are not in a perfect world; we have too much spending and every program needs to be on the table.
And if firing a yellow avian is the first step to lower spending, then call me a Muppet hater.