People Power

A recent article proclaimed:  President Barack Obama appeals directly to the public in hopes of influencing a deficit reduction deal.” That was a step in the right direction as Congress was largely dysfunctional during the debt ceiling negotiations. Therefore, it made perfect sense to go around Congress and encourage the U.S. public to exert pressure on their representatives to put the country’s interest above their own. But now, a Congressional “super committee” is charged with determining cuts in the second round of deficit reductions. A presidential end run has become an even greater imperative.  

What does the President need to say? First off, it is time to tell the truth; no fudging the figures or sugar coating the facts. Second, he must clearly explain how we created our current difficulties – if we don’t know where we are, how we got there and why things aren’t working out, it is hard to know what to do next. Here are some of the issues the President needs to address:

    • We tried to be the global policeman in Iraq and Afghanistan. If the American people believe a war is necessary, we need to raise taxes to pay for it. The law of “there is no free lunch” was never rescinded.  
    • We instituted subsidies to farmers and the oil industry a long time ago and then forgot to remove them when conditions changed. Outdated, inappropriate laws need to be repealed.
    •  We gave tax breaks to hedge fund managers – the last people on the planet to need them – which they used to make political contributions to continue their favored status. Time they made some financial sacrifices.
    •  We created a tax code that is decipherable by only a few high-paid accountants and lawyers and that requires citizens to waste time and money filing their taxes. A wasteful bureaucracy to administer and police this jumble of words continues to grow; many people point to the absurdity of the tax code as justification for not paying their taxes. Make it simpler, fairer and more effective.
    • Entitlement programs need serious reforms now. Medicare is based on perverse incentives and a counterproductive concept of who should be the demander of services. Social security uses longevity assumptions that are no longer valid and cost of living adjustments that are actuarially unsustainable. Prescription drugs benefits have never been fully funded. Time to get real and fix the flaws from the ground up.
    • We give mortgage interest deductions for second homes and to those who don’t need it for their first homes. Take away the interest deduction and people might not have been encouraged to buy homes they couldn’t afford and the financial crisis might have greatly mitigated.

Left to their own devices Congress will always base their decisions on what is best for their reelection. If the President comes to Americans with a series of meticulously researched, factual presentations – independently fact-checked and scored by the CBO to ensure objectivity – I have no doubt the public can apply sufficient pressure on Congress to produce an equitable, realistic and effective bill that will reestablish fiscal sanity. As Charles de Gaulle once quipped, “I have come to the conclusion that politics are too serious a matter to be left to the politicians.” No deficit reduction bill will be painless – we have all made short-term, selfish decisions for a long time and we will have to pay a price. Let’s at least make the end result worth the discomfort we will have to endure.


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