When my partner’s dad was still living, and we would sometimes go out to dinner with him and his wife, there was never any question of who paid. He would always contrive to grab the check first and plunk down his cash (he didn’t much care for credit cards, as that meant going into debt), no matter how fast we might have tried to get at it before him. That’s the kind of man he was, a former navy commander, upright, honest, no-nonsense, and the very definition of responsible. A Republican all his life in that old-fashioned, now almost quaint, fiscally responsible take-care-of-yourself-and-those-you-love sort of way, he was a man I greatly admired.
So, I’m left to wonder about Republicans these days and how they treat fiscal responsibility. Yes, I know, they talk a lot about it, but what does it really come down to? There’s a report in a recent issue of the Los Angeles Times that lists some very interesting facts. First of all, the way that economists measure debt is, in a sense, not so terribly different from the way you and I might in terms of the family budget. If you borrow money because you spend more than you take in, you go into debt. Pretty straight forward stuff. And that’s exactly what happens with the US debt, too. If we spend more than we “make” – and what we make is measured in a general way by the Gross Domestic Product (GDP) – and borrow to cover the shortfall, then we’re in debt. Another thing to understand is that virtually all nations carry some measure of debt. That’s just the way the world seems to do business.
What the big question really comes down to is: how much debt is too much debt? Another way to put that is: how much debt is sustainable in the long run? According to the nonpartisan Committee for a Responsible Budget, about 60% of GDP is what most countries consider a reasonable and sustainable debt load to carry. OK, I’m willing to accept that, as much as I wouldn’t want that kind of debt for our household budget. Still, I get it that countries are not the same as families when it comes to economics. Now, for a simple guy like me, there are only a couple of ways to handle debt. You can either a) make more money to cover your expenses, or b) you can spend less money, or there’s c), which is some combination of a) and b).
It appears as though the Republicans pretty much favor b) by a long shot over a). Spend less, spend less, spend less! Reduce the amount of money the government pays out, and all will be well. But that can only go so far, and like all budgeting, it comes down to a matter of priorities, that is, what to cut and what to keep? On the other side of the equation, and to be fair about things, maybe the Democrats sometimes do lean too heavily on the a) part of our proposition above. You can’t only take in more. So, when it comes right down to it, I guess I’m a c) kind of guy. Why not spend less AND take more in?
It’s true that this means that we would have to agree on where and what and how much to cut. That’s not an easy question, I know, since my priorities may not be your priorities, but in the end we have to come to some agreement. Another contentious question may be the biggest of all: how do we raise GDP? How do we make ourselves more productive? The Republican answer is always to get the damn government out of the way and let the market do its thing, while the Democrats advocate for both increased taxes (especially on the wealthy) and for some measure of government oversight and assistance. These are maybe simplistic ways of putting it, but in the aggregate I think it’s not too far from the truth.
Now, from what I’ve seen, especially in the free-wheeling Bush era of unhappy memory, when the cat was away, the mice just loved to play. Government got out of the way, fiscally anyway, if not when it came to social, so-called “values” issues, and look what happened. The rich got richer and richer, and the rest of us got a recession! So it doesn’t look to me as though that worked so well. And what’s so unfair about asking those who earn a lot more to pay at least the same percentage in taxes as you and I?
Right now, again according to the Committee for a Responsible Budget, the country’s current debt load is at 70% of GDP, which is maybe shaky at best. And Pres. Obama’s plan would push us to about 80% in the next decade. That sounds pretty damning, until we look further and find out where the proposals of the current Republican nominees would take us. With Romney’s, we’d reach between 85% and 96%; with Santorum’s proposals, we’d get to a dizzying 104%, and with Gingrich’s, we’d hit an astronomical 114% of GDP! The only guy whose economics seem to work is Ron Paul’s, and even with his we’d still be at 76%. But remember that his proposals mostly use cuts, and he thinks that raising taxes is another word for jihad.
So, the question of who pays still remains. You can’t go on forever borrowing from people. Sooner or later, in my experience anyway, they want you to pay them back — with interest! Again, that’s why, for now anyway, the only choice we may have is to make whatever cuts in spending we can agree on, AND to raise taxes, especially on those who can afford to pay them. Maybe someday the economy will come roaring back so strong that we can actually lower individual and corporate taxes, but for the moment I’m not counting on it. And the above numbers don’t lie. What’s happening now in the economy is unsustainable. Just ask the Greeks, and maybe the Italians and the Spanish, as well.
The good commander, my partner’s dad, always picked up the tab. And we were grateful, as much as we wanted to take them out to dinner once in a while, too. But let’s not wait until there’s nobody left to pay the bill. Let’s make the hard decisions now that will set us on the road to fiscal solvency. And let’s not get duped by a bunch of Republican blather about how responsible they are, when their numbers just don’t add up – or to put it another way – when those numbers add up to just way too much.