Debt Crisis – Whatever happened to Bowles-Simpson?

November 10, 2011

G’Day!

The bipartisan Debt Reduction Commission co-chaired by Democrat Erskine Bowles and Republican Alan Simpson completed and submitted to President Obama in February a rational and comprehensive approach to our country’s fiscal and debt crises. I posted articles praising the work of the co-chairs and the commission members on April 1, April 16, and July 22. (See “Bowles & Simpson Have it Right!”, “Obama Ignores Bowles-Simpson Debt Reduction Commission – Again!”, and “Debt Reduction: Bowles & Simpson Have it Right – Redux!”) To date, President Obama, the Democrats and the Republicans in the House and Senate have fundamentally ignored their proposal. Why their recommendations have been ignored by our government, and especially by the President, who established the commission, is a “puzzlement”?

The final Co-Chair’s proposal, “The Moment of Truth”, included both long and short-term government actions to resolve our fiscal and debt crises, contains nearly $4 trillion in debt reduction over 10 years, and was approved by eleven (61%) of the eighteen bipartisan members of the commission. As stated in Guiding Principle #2 of the draft report, “The Problem is REAL – the Solution is Painful – There’s no Easy Way Out – Everything Must Be On the Table – and Washington Must Lead”. Their proposal is comprehensive. It includes cuts and caps on discretionary spending and revenue enhancements through major tax reform to broaden the tax base, simplify the code, reduce tax rates, and cap revenue at 21% of GDP. It reduces spending for entitlements including healthcare and social security and eventually caps total spending at 21% of GDP. The proposed plan stabilizes the debt by 2014, reduces debt to 60% of GDP by 2024 and 40% by 2037. What’s not to like??

As noted above, it is a mystery to me why this proposal, developed and approved with bipartisan support, was shelved by Obama and ignored by Congress since it was formally delivered to the President nine months ago. While these are difficult and trying times, we should expect and demand that our President and Congress put partisan bickering and reelection concerns aside and act for the benefit of the American People. Time spent on campaign fundraising does not reduce our debt or improve job creation and economic growth. We deserve rational behavior from our elected representatives and should demand the compromise and cooperation necessary to correct our economic problems and return our great nation to a path of growth and prosperity. Admittedly, the Co-Chair’s proposal is controversial. It is also realistic, responsible, comprehensive, and should be receiving the immediate and serious attention of our President, Congress, and currently the “Super-Committee” (who are looking for a mere $1.2 trillion over ten years).

Every sensible citizen knows America has an unsustainable debt crisis that, if not corrected quickly, will lead to financial and economic disaster for our country. Socialism does not work. Greece is not a role model for government in America. Our current government is too large, too oppressive and is out of control. Economic growth is based on opportunities not restrictions and lower tax rates not higher regulations. Escalating government spending must be halted and its intrusion in our lives and businesses reversed. Tax reform to broaden the tax base, simplify the code, lower rates (especially corporate), and increase revenues is essential. Our government MUST be business friendly and promote the entrepreneurial spirit necessary for economic growth and global competitiveness. We need to bring back the constitutional freedoms and personal liberties that led us to be the greatest nation on earth. The Bowles-Simpson proposal is a good start.

The Old Guy PhD


Is Our Government Broken? – Redux!

June 3, 2011

G’Day!

Nothing has really changed since my earlier post “Is Our Government Broken” on March 16. If anything, the situation is now worse and potentially more detrimental to our country’s international reputation and the growth of our economy. Obama and the Democrats appear to be determined to ignore the problem and demagogue any efforts by the Republicans to actually confront and attempt to resolve our fiscal and debt crises. While there will probably be an extension of the debt ceiling this summer, it will more than likely be another temporary fix and will just “kick the can” further down the road. As I have repeatedly said, this is madness and intolerable behavior for Congress and the President.

The good news is we now have three rational proposals available, any one of which would start to solve our problems. The bad news is that neither the President nor Congress is seriously considering any of them. The proposals available are: 1) the bipartisan Bowles-Simpson Debt Reduction Commission report, “The Moment of Truth”; 2) the Paul Ryan 2012 Budget Proposal, “The Path to Prosperity: Restoring the American Dream”; and 3) the recent Heritage Foundation Special Report, “Saving the American Dream: The Heritage Plan to Fix the Debt, Cut Spending, and Restore Prosperity”. The Bowles-Simpson report and The Heritage Foundation Special Report are fully comprehensive proposals dealing with all sectors of our economy, including desperately needed tax reform, entitlement reform, and cuts in discretionary government spending (including defense). The Bowles-Simpson report was approved by 61% of the members of the commission but for unexplainable reasons, has been ignored by the President and Congress. Paul Ryan’s proposal, which was passed by the House but rejected by Democrats in the Senate, is reasonably comprehensive but does not address Social Security and, in my opinion, does not adequately address Defense spending. In addition to the proposals above, the GAO report “Opportunities to Reduce Potential Duplication in Government Programs, Save Tax Dollars, and Enhance Revenue” has already identified unnecessary duplication, overlap, or fragmentation existing across our Federal Government totaling BILLIONS of dollars in ANNUAL SAVINGS. This is also a good place to start.

I have referred to each of these reports in several previous posts on this website and, for the sake of brevity, provide appropriate links below:

The first two (2) paragraphs in my initial post on this subject are still relevant:

“Yes, our government is currently broken and it needs to GET TO WORK! The events taking place in our national government and some states do not represent the principles of elected representative government upon which America was founded. We elected our officials to serve the needs of the people, not the desires of their political party, big business, or unions.”

“President Obama, both Democrat and Republican Congressional Representatives and Senators (with minor exceptions) are not currently working for the long-term benefit of America. Nearly all are posturing and working for what they perceive as the good of their political party and personal reelection. Citizens have common sense and know that we have fiscal and debt crises that are too large and unsustainable. We must get our State and Federal Governments in order.”

Our federal government is out of control and has grown to be too large, too self-oriented, and is not performing their duty to be responsible to the American people. To date the Democrats have proposed absolutely no specific plan to elevate our fiscal and debt crises (other than increase tax rates) and have not passed a budget in over 700 days! President Obama is also not exercising leadership in this crisis and, as indicated recently, is “leading from behind”. Our President is already in full campaign mode in preparation for the 2012 election (which can’t come soon enough!) and is engaged in travelling, golfing, and political speeches. Obama’s proposed 2012 budget is an embarrassment given the magnitude of our country’s ongoing financial problems and projects spending next year of another $3.7 trillion and an addition to the deficit of $1.6 trillion. Over the next 10 years the new Obama budget proposal is expected to produce a further cumulative deficit of $7.2 trillion, bringing our overall national debt to approximately $22 trillion. Again, this is madness and irresponsible and does not serve the interests of the American people!

Most of the Americans now realize “Big Government is Our Problem”! Let’s fix it and put our country back on a solid jobs and economic growth foundation! Adopt one or a combination of the above proposals and let’s get to work.

The Old Guy PhD