Financial Follies
As chaos spreads around the world and the U.S. deficit deepens, the White House seems confused and Congress can’t even pass a budget. Have we ever lived through a time of greater incompetence?
In the last two days, two key policy spokesmen for the White House have given two entirely different visions of where we’re headed.
One is Paul Volcker, legendary former chairman of the Federal Reserve. At 82, he’s seen a lot, and he says time is “growing short” for the nation to address its burgeoning financial problems.
“We better get started,” he said in a recent speech at Stanford University. “Today’s concerns may soon become tomorrow’s existential crises.” In particular, he warned of “uncontrolled borrowing.”
The other is Tim Geithner, our youngish Treasury secretary, who brushes aside talk of fiscal Armageddon. “The important thing,” he said Wednesday, “is you’re seeing the U.S. in a much stronger recovery than people expected even three months ago.”
The lack of clarity and absence of a unified message is stunning. Fact is, the structural deficits the U.S. faces are monumental.
By some estimates, we need to find $107 trillion over the next 75 years to fund all our promises. In the next 10 years alone, deficits will exceed $10 trillion — lifting annual debt payments by 300% to more than $900 billion a year.
Given such a grim outlook, Congress should be in crisis mode, right? Wrong. In fact, our representatives have never been more frivolous, playing on like the band in the ballroom of the Titanic, sawing on their instruments as the ocean pours in.
Despite their overwhelming majority in Congress, Democrats can’t even come up with a budget. And as they dither, the fiscal picture gets worse.
Last year’s shortfall of $1.4 trillion, we were told, would shrink as trillions of dollars in stimulus and bailout spending kicked in. Sorry. This year’s gap will likely be even bigger.
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