Whose Economic Policy?
The media is having a field day. Will there or won’t there be a sequestration? I wonder who is in charge of White House economic policy.
News report after news report tells us of impending disaster at airports, in food prices, and military preparedness. Yet compared to the size of the deficit and total government expenditures, the cuts are de minimis. Why has the White House fed this frenzy through carefully orchestrated news conferences and interviews?
The President is said to be seeking more tax increases with any additional cuts. The “Buffet Rule” tax (at least 30% rate on those earning $1 million or more) is thought to be his goal. Unfortunately, President Obama wants to offset any reduction in cuts with new revenue. Sensible policy would more look like “in addition to” cuts.
The nature of the sequestration law is foolish. It mandates across the board cuts rather than cuts where department heads decide the specific programs. What is not foolish is beginning the long road to fiscal sensibility.
The tragic comedy being played out almost seems as if there are competing interests within the White House, all the while playing in a land of Republican wolves. Where are the adults?
First the Administration must acknowledge that the country faces two problems, (1) national health care costs and (2) non-healthcare government spending that exceeds tax revenues. Until these problems are separated, all government actions will be set up for failure. Further, we live in a real world. Any steps to deal with the two problems will encounter potential adverse impact upon the economy, or vested interests who support the current forms of Medicare and Medicaid.
Instead we are hearing a rhetorical melody about the poor middle class and the need for strong national defense. In the background are chords of pure “gotcha” politics. Maybe we need a different type of change, finally one we can believe in.
Ironically, simply cutting entitlements will shine a bright light upon Congressional members who would continue to enjoy a very rich and costly healthcare plan. Hmmm, where would the shared sacrifice be?
The silver lining seems to be that the 24/7 news media has something to write and talk about. They will again look out of touch when the immediate consequences turn out to be not severe.
The longer term implications, however, such as misidentifying the real issues and the need for all Americans to participate in its solution will be avoided once more. What type of economic policy is that?