Magazine article USA TODAY

What Now?

Magazine article USA TODAY

What Now?

Article excerpt

HAVING THE TERM "fiscal cliff' shoved down our throats for months, it would be humane to retire it once and for all. Besides, there is a cliff we are descending--a debt and deficit one--far steeper and more treacherous. The dispiriting compromise negotiated by Sen. Mitch McConnell (R.-Ky.) and Vice Pres. Joe Biden was a pathetic reminder of our inability to stop the fall. This compromise does nothing about the profligate spending habits that have been enabled by the Federal Reserve's policy of cheap money and low interest rates and foreign investors' continual purchase of our debt. The removal of millions from the income tax rolls and the increase in entitlement recipients give them little interest in reforming the tax code and controlling spending. The size of this constituency only feeds Pres. Barack Obama's unwillingness to offer serious reform and to postpone judgment day. Should the next four years resemble the previous four, the solutions will take longer and be harder to construct and more painful to enact. Four more years of sluggish economic growth, trillion dollar deficits, a weak job market, and little entrepreneurial innovation will leave this country weaker, its population more divided, and the world more unstable.

In the 20th century, Americans experienced two decades when our economy was weak and influence reduced: the 1930s and the 1970s. Pres. Franklin D. Roosevelt's policies of governmental intervention, wealth taxes, and governmental job programs did little to revise the economy and only discouraged entrepreneurial activity. As the U.S. struggled to crawl out of the Great Depression, the country had neither the strength nor the desire to face the global calamity that was unfolding. The virus of fascism and communism had infected Europe and Japanese militarism was doing the same in Asia. It took Pearl Harbor to awaken the American spirit. During the Harry Truman-Dwight Eisenhower years, the U.S. economy boomed, liberal expansion was in check, and the debt was kept under control.

In the 1970s, the economy, challenged by oil price shocks and international competition, sputtered again. During the Richard Nixon, Gerald Ford, and Jimmy Carter administrations, price controls, oil and gas rationing, and high marginal tax rates exacerbated the problem. As stagflation weakened our economy and neo-isolationism characterized our foreign policy, the U.S. became weaker and distracted. For the first time since World War II, America was the observer of events, not a driver of them. Soviet influence spread into Africa, Southeast Asia, and Central America. In the last years of the dismal Carter Administration, the Iranian Revolution inspired the growth of another totalitarian virus---radical Islam. The 1980s and the 1990s, however, saw a revitalized U.S. economy and spirit. America again was the driver of events. Just as fascism was crushed in the 1940s, Soviet communism, as a consequence of Pres. Ronald Reagan's persistent pressure, imploded in the late 1980s.

Can we expect to see another cycle of recovery? History is not on automatic pilot. We have yet to regain our beatings from the financial crisis of 2008. While the President and the Congress construct short-term patches, deficits go uncontrolled and new industries struggle to be born. …

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