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Sunday, November 14, 2010

Is America Really Ready For "Change"?

Much has been made of the dramatic Republican surge around the nation in the 2010 elections, particularly in Congress. The new Republicans, especially those running under the Tea Party label, all made gaining control of government spending and debt the centerpiece of their campaigns. Very few people object to financial responsibility, though many are skeptical given how many times we have heard this from both parties over the last couple of decades. I, myself, am actually less skeptical about the willingness of the politicians to address the issue (and my skepticism is considerable), than I am about the willingness of the American people to make the sacrifices that will be necessary to make genuine progress.

If the United States is going to really gain control of spending and the ballooning national debt, Americans are going to be required to sacrifice in ways that haven't been seen since the Great Depression. The question is, given the partisan nature of our politics and the seemingly self-focused and entitled nature of the American people, whether these sacrifices will be accepted by enough people to make them a reality.

Anyone who believes that we can tax our way out of the problem without reducing spending (the liberal view) isn't being realistic. On the flip side, anyone who believes we can just cut spending to solve the problem (the conservative view) is equally unrealistic. People need to view the current spending/debt problem of the government the way they would a family with the same problem. Ask anyone who has climbed out of debt and they will tell you it took both increasing income (taxes) and reducing expenses (cutting spending). This requires sacrifice and commitment, and yes, pain. While there are clearly individuals who have the strength to successfully negotiate this process, I am not certain that the American people as a whole are ready to face this challenge.

A major problem we face in this dilemma is the partisanship rampant in our politics, where both sides see compromise as a weakness, and in some cases as something to be avoided no matter what the cost. With so much of our government spending already pre-determined because they are "entitlements" based on set qualifications, discretionary spending is actually a relatively small part of the national budget. This means sacred programs will have to be cut and every program will have to reduce spending, no exceptions.

Let's be honest...the structure of programs like Social Security and Medicare will have to be seriously re-evaluated. Military spending will have to be subject to cuts. Incentive programs to corporate America will have to be scaled back. Farm subsidies, oil subsidies, manufacturing subsidies, etc. will need to be reduced or eliminated. Congress will have to take the lead and reduce the number of staffers, committees, hearings, and foreign trips. Individuals will need to be willing to forgo the pork barrel projects in their district (which is how they choose most of their representatives in the first place). Tax rates may have to increase at least for the duration until real progress is made on the debt. Corporations and investors may have to lower their expectations for what is a reasonable return on investment (which has been outrageous in the last two decades).

Finally, individual Americans need to understand that their participation in the necessary sacrifices is not optional. Americans need to take an honest and objective look at their lifestyle and adjust expectations until we have met this challenge. We will have to consciously choose to build smaller homes (and stay in them longer), drive our cars more miles before replacing them, eat out less often, conserve energy to reduce utility bills, avoid indulging our children with every desire of their hearts, and stop paying exhorbitant prices for ordinary goods because they have the right "brand label". In other words, Americans are going to have to make many difficult, heart wrenching, sacrificial choices.

Getting the politicians to accept this challenge is actually the easy part of meeting this challenge. The difficult part is convincing the American public to accept the "medicine". To most people, sacrificing means "others", not themselves. As I said, I'm skeptical.

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