Thursday, August 15, 2013
I like being right. As a kid I was rather obnoxious about it. Then in my 30s I was wrong, I was very wrong. I lost everything: relationship, career, home, money, status , etc. As I rebuilt my life I began being right again – and all seemed good with the world. Then I was wrong again and the fall was greater than before. In the roller coaster of life I’ve learned lessons, become more diplomatic and am the first person to admit when I’m wrong. I may be right, but I try not to be righteous. I’m older, perhaps wiser, and certainly heavier. Despite this progress, the arrogance of regularly being right continues. It is the personality trait that most qualifies me for public office.
Elected officials – whether they be local or national – make definitive statements all the time that are often not based in fact, but best available information. In February of 2013 the White House and Congress were each wringing their hands and warning of the catastrophic consequences should sequestration kick in. The plan was a mutually agreed to “worst case scenario” that averted the debt ceiling crisis of August 2011. It cut specific programs by fixed amounts and didn’t permit managers the ability to reallocate resources to fill out any gaps.
The “blunt” across the board cuts kicked in and there was some inconvenience. The most tangible impact for the public at large was the cuts to the FAA which were delaying flights because Controllers were cut back. Congress, affected themselves as frequent fliers, also got an earful from business and leisure travelers. Within 24-hours of the impact being felt they passed a law (with the last paragraph hand written) that refunded the FAA.
The other consequences haven’t materialized. If you want to tour the White House, too bad. Parks have had cutbacks. The military has trimmed people’s schedules. None of these cuts were planned, thought out or strategically implemented. By and large the impending doom to the US economy that was promised hasn’t materialized.
The 2013 deficit is now projected to be 37.6% lower than previous estimates, more than $400 billion dollars. This good economic news is not all due to reduced government spending, which only started in April (half way through the fiscal year) – but rather a combination of savings, increased tax revenues and repayments from the 2008 bailouts by Freddie and Fannie Mac. It will be the first non-trillion dollar deficit since 2008. (I somehow suspect the same President who warned of Sequestration and austerity will simultaneously take full credit for nearly halving the annual debt.)
With the economy seemingly not impacted by the sequester cuts (which are scheduled to increase each year for the next several years) – one could conclude that everything’s fine and nothing should be done. Nothing could be further from the truth. From my own experience as a businessperson in both the for-profit and the not-for-profit world and my own personal circumstances – planning is fundamental.
The every-few-months process of Congress passes and the President signs Continuing Resolutions is not effective. Fourteen (14) times since he has taken office the government has received short-term reprieves. Nobody can run a department, plan for the future or operate with such uncertainty.
The budget battle will return after Labor Day and so will the tired old arguments between the parties. The result of the impasse between Republicans and Democrats has delivered a much lower deficit. It’s not time to celebrate yet, though. The United States government continues to spend $600 billion more than it brings in – or in more simple terms $1.20 for every $1.00 that it brings in.
Let’s try something that hasn’t been tried in a dozen years since the Clinton era: spend only what revenues come in. Then let’s set aside money to pay down the nearly $17 trillion in accumulated debt. Instead of a common sense approach to the nations finances, more of the same back and forth will continue and I’ll once again be right. Go figah!