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Public Statements

An Artificial Crisis

Statement

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Washington and the talk shows are captivated by talk of the "fiscal cliff": the combination of automatic spending cuts and revenue increases scheduled to take effect at the end of the year. Unfortunately, this is the wrong conversation for America to be having.

The fiscal cliff is an artificial crisis created by renegades who used America's statutory debt limit to hold the nation hostage in August of 2011. (How absurdly irresponsible to say we will teach ourselves a lesson by not paying our debts!) Just as the cliff was created by a vote of Congress then, it could be dispensed with by a vote of Congress today. Yet negotiators in Congress and at the White House are continuing to operate within the narrow, artificial framework imposed by last year's hostage-taking: debating, for example, whether cuts to Medicare should be balanced with an appropriate increase in marginal tax rates to 39.5 percent.

We would do better to put today's challenges in their proper context. From time to time in our history America has faced very large public debts before, most notably after the end of Word War II. Each time, we got to work, worked hard as Americans always do, and built the economy by building and doing things. We did not wring our hands over what America cannot do, but rather set about doing what we can do. There's no question that the debt is an important problem -- but the United States is not, as some would have us believe, defined by its debt. It is defined by its people, its infrastructure, its creativity, its innovation, its drive. We are not a "poor debtor nation," as one might think listening to the debate this month. Our budget deficit is not an existential crisis.

Remember that, as recently as a decade ago, the United States had a balanced budget and was paying down the debt -- not because of a gimmick or a response to a perceived crisis or a constitutional balanced-budget amendment, but because of rational lawmaking and policies that led to a thriving economy. We are still the richest, most productive, most capable country in the world. We should be asking how we will set about making certain that all Americans have food, housing, schooling, jobs, and vibrant culture. If we do those things, the resulting growing economy will make our fixation on a phony fiscal crisis recede into the past.

Those renegades held us hostage in 2011; we shouldn't hold ourselves hostage today by arguing within the false framework they set then.


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