Fiddling like Nero

The elephant in the room that nobody wants to discuss — especially elected leaders and presidential candidates — is the nation’s ticking debt bomb. Everyone wants Social Security, Medicare, good roads, big houses and lots of stuff to put in them.  But the U.S. is now the world’s biggest debtor nation — the national debt has doubled in the past seven years. And the housing bust has exposed many Americans to the vicissitudes of overborrowing on mortgages, car loans and credit cards. Companies, meanwhile, inexorably cut back on pension and healthcare benefits, putting more of the burden on workers. We all know that 50 million Americans have no health insurance at all.  President Bush introduces a budget that ignores the alternative minimum tax problem and pretends that the Iraq War doesn’t need funding.

Back in the 1970s, my father was a member of a blue-ribbon panel selected by Congress to come up with solutions to keep Social Security solvent for future generations. Well 30 years later nothing has been done and funding Medicare is another fast approaching train wreck. Democrats talk about Universal Health Care coverage and taxing the rich, while Republicans hail cutting taxes and increasing the defense budget (America spends more on defense than all our enemies and friends combined). Everybody gives lip service to cutting earmarks, but earmarks comprise less than 1% of the federal  budget. In effect, both parties adopt the let’s keep borrowing solution.