How We Became the United States of France

Well, don't worry... the European Central Bank is coming to your rescue!

Oh how you loved saying that!!!

I've been researching the actual costs of government, what we'd like from it (including single payer healthcare), paying down the debt responsibly, etc... and came to the same conclusion just the other day. I even referenced France while considering that the U.S. doesn't necessarily die when our government undergoes a massive change. We’re looking at a budget over 3 Trillion already. Sounds extraordinary until you consider that to behave responsibly (with our current amount of waste), we probably require a budget of 5 Trillion. I don’t see the day coming when Americans are collectively prepared to face the truth… though, I also don’t know how much longer they’ll get away with ignoring it.

What do you suppose are the possibilities of any significant admission of this pending reality from politicians? I don’t see how a President can admit it until after he’s elected he second term, if he so desires one. I think a significant number of Senators can and should and are thereby extra guilty for pretending we’re not heading towards financial disaster. I don’t see how Congressmen, who have to be in perpetual campaign mode, could ever share the truth and still be around long enough to address the issue.

I would love to hear what you think can and should be done, Robert.

There is a US national debt limit that congress has to vote to increase explicitly (i.e. they can't just force a bill through, they themselves have to vote specifically to allow the US debt to pass the limit) and congress has voted to increase this limit a number of times during the Bush administration.

I think at least two basic things are needed. People need to start getting pissed off when they do that, and a bill should be passed that creates automatic incremental reductions in the debt limit without explicitly raising it (temporarily, it would still reduce incrementally and require explicit votes on the line to raise it again).

The requirement to vote specifically to increase debt is a good thing, or the debt would just increase automatically with every big spend passed through (e.g. "save Social Security" is an easy argument to win, but "increase all our debt" needs to be made explicitly first).

Those are the basics I see as a start, but I don't blame American leaders as much as the American people. American culture is such that most don't seem to have the foggiest notion of individual fiscal responsibility and if they can't even balance their own revenue versus expenditures it's hard for me to see them caring enough about the national debt to put pressure on their leaders not to increase it.

I'd like to see more changes, for example I'd love to see the national debt be tied to taxes, and if congress votes to increase the debt limit it should require that they also increase taxes every time. At least the common man in America understands taxes and would have an objection to them even if the common man might not care about debt and the future they care about the paycheck being smaller now. And if they are going to let the leaders increase the debt now, they should start paying for it now.

Otherwise, the people with the upside approve the debt while the people with the downside inherit it.

That's a good idea.

Interesting Robert, thanks. I came to a similar conclusion on FreeDuck's Let it crash thread. I think if Bush were a true conservative; he would insist on something responsible being added to the bill before he signs it. Somehow I doubt he cares or has the courage. Interestingly, in recent history, only Bill Clinton stands out in my mind as a President who might have done such a thing. I still have to wonder just how much of his fiscal responsibility resulted from Ross Perot forcing the issue to the forefront. (You may remember Ross talking about the catastrophic results if we didn't address the 3.5 Trillion dollar debt, balance the budget, and add a line item veto.) He was right then, and it's still right now.

This is oh so true.
The US has been living over its means for decades. Almost two generations. And that is the people, not only nor mainly the government.
It was the prize won for becoming the world's superpower (not only economic, but also geopolitical). But this was not understood by the public, who still buy all sorts of nationalistic propaganda (about them being the hardest-working, brightest, most productive & inventive people in the world).

If economics were about ethics, I would say: "Hey, now they've got their commeuppance".
But economics isn't mainly about ethics. An economic failure for the US would be terrible news for the rest of the world. In many aspects affecting everyday life... macroeconomics, politics, etc.
A bailout is needed. And world power politics rules that there will be little payment from the American culprits (to the Wall Street sharks to the credit-card loaded lower class consumer). So there will be no strong ties in the agreement.
And both Obama and McCain will offer their version of (still more) tax-cuts to woo voters.

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Will continue later.