MY VIEW: Rudy Penner November 2011
CRFB board member Rudy Penner recently authored a CNN Money op-ed in which he writes that Congress has delayed the necessary fiscal adjustments for so long that now they have become quite painful, resulting in nothing but political gridlock. He also states that while he hopes an agreement will be reached over the next year, the most likely scenario is that a fiscal crisis will be the only thing that can force Congress to act. CRFB hopes lawmakers can act thoughtfully and proactively, because it's always better to make changes on your own terms and well in advance.
I believe that the president's fiscal commission got the balance about right when it proposed solving 70% of the long-run problem by slowing spending growth and 30% by raising revenues (not counting the resulting savings in interest costs).
Although I have raised the hope that productive negotiations might occur next year, a wise betting man would not risk much on this outcome without demanding huge odds. It is much more likely that we shall have to wait for a sovereign debt crisis similar to Greece's before our politicians act rationally.
Britain lost its preeminent position in world finance primarily because of huge debts accumulated during World War I. The United States may be the first country in history to lose its dominance because of rising health costs.
Click here to read the full op-ed.
"My Views" are works published by members of the Committee for a Responsible Federal Budget, but they do not necessarily reflect the views of all members of the committee.