Clayton Mitchell: We've Gone Down to the Crossroads

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By Clayton A. Mitchell, Sr.

America is at a crossroads.

A question before the nation is whether to preserve the current entitlement programs as they currently exist or to reform them and adopt a different approach. The publicly-financed retirement and health care hegemony entrenched our public policy has permanently established these programs within the fabric of American society. Americans treat the elderly and the infirm with such a high degree of veneration that it does not permit constructive criticism of the insolvent programs purportedly designed to ensure their well-being.

The “shellacking” November 2010 Tea Party victories rejected the federal government’s overspending, yet paradoxically the latest opinion polling shows that the vast majority of Americans do not want entitlement programs disturbed. How are these two views reconciled?

For decades, our government has engaged in various efforts to fund and administer the Social Security, Medicaid and Medicare programs. According to the Congressional Research Service, the Federal Debt Ceiling has been raised 74 times since 1962. On the brink of crisis earlier in August, the President and the Congress once again raised the debt ceiling (with conditions) in one fell swoop a staggering additional $2,400,000,000,000.

President Obama put his finger on it when he said we need a “balanced approach” to solve our fiscal maladies. However, the definition of “balanced” differs from one generation to another and from one political party to another.

Conservatives loathe solving the national debt problem through increased taxes and the additional borrowing of fiat currency. However, for conservatives to say that their party finds repugnant financing the economy through Chartalism ignores history. Ronald Reagan, the purveyor of “trickle down” economics and Tea Party icon, approved raising the debt ceiling above $1 trillion for the first time in 1981. During his tenure in office, he repeatedly approved raising the debt ceiling and more than doubled the national debt to $2.3 trillion by the time he left office. The conservatives’ affectations that Mr. Reagan disapproved of quantitative easing or government borrowing to fund federal programs are without merit.

Collaterally, for liberals to assert that Social Security and Medicare is a bulwark where retired seniors have an impenetrable vested property right is flawed. For decades, the “Greatest Generation” and the newly-retiring “Baby Boomers” have had full notice that the entitlement program benefits they covet were on an unsustainable fiscal path to assist subsequent generations. Previous Presidents and Congresses have merely scotched-taped together the entitlement programs to keep the Ponzi schemes going for a few more election cycles.

Collectively, these two generations never demanded that their elected representatives adjust the entitlement programs or increase their payroll taxes in order put the programs on a realistic path to solvency. The retirement generations mistakenly believed they would be “dead and gone” before the problem reached a crisis level. These generations deliberately determined that it was better for their purposes to push the problem down to those too young or naïve to vote and to those who have not yet been born. It has been easier for them to defer tax increases, borrow money and inflict future financial pain on those with whom they have not had to politically engage.

They are wrong. Because the retirement generations come to the negotiating table with unclean hands, for those “55 and older” to escape any or all economic pain or financial accountability for their mismanagement by assigning the entire responsibility of entitlement debt payments (once again) to the younger generations is callously oppressive.

A recent Rassmussen Report stated that 47% of Americans believe America’s best days are in the past. America has been in rapid decline because we have geometrically increased our national debt without repayment mechanisms and have demanded the expansion of the government’s role beyond our Founders’ wildest dreams.

We have twice recently “printed money” through quantitative easing to stimulate an anemic economy because a dozen or so influential M.B.A graduates believed it was a good idea. We have elected representatives from both parties who perpetuate expanding entitlement programs while voluntarily ignoring that they are insolvent and actuarially unsustainable. We have fought two wars without a funding mechanism, implemented the new Medicare Part D program without a revenue source, bailed out failing Wall Street firms, purchased stock in debt-laden automobile manufacturers, and spent almost a trillion dollars on “shovel-ready jobs” (that admittedly were not shovel-ready).

Washington has distracted us with a masquerade of “good faith” attempts to address our fiscal woes. With the Simpson-Bowles Commission and the Gang of Six, we pretended that our leaders put together viable bipartisan solutions to our intensifying economic crisis. Notwithstanding the merits of these proposals, representatives from both parties summarily dismissed them under special interest group pressures.

The Republicans do not acknowledge that there is any benefit to increasing tax rates on anyone and fervently subscribe to the “rising tide of ships” financial theory. The Democrats do not acknowledge that Pareto improvements can or should exist in the American economy or that balancing the budget is possible without increased tax rates. Therefore, the two parties reached a negotiated stalemate in August.

And what is Washington prepared to do next? Form another august bipartisan “super” commission to identify $1,400,000,000,000 in deficit reduction by Thanksgiving or face across-the-board spending cuts - spending cuts that will be spread out (in a back-ended fashion) over an entire decade. In either situation there are insufficient proposed remedies to address the entitlement programs’ insolvency. This latest attempt at an experimental bipartisan solution is no solution and is an affront to the American peoples’ intelligence.

Washington tries to convince us that they have found solutions to our debt problems; however, Main Street Americans know the truth. The entitlement programs comprise approximately 65% of the federal budget and increased spending in these programs is mandated by statute without regard to affordability. According to the Social Security Trustees, Medicaid will be out of money by 2023. Social Security and Medicare are currently paying out more in benefits than they receive in revenues. Standard & Poor’s has threatened to again downgrade the United States’ credit rating another notch to double-A within two years. And for the second time in three years the stock market crashed. Is the “super commission” charged with solving the entitlement programs problems? No.

Americans want authentic leadership to emerge in Washington and a viable solution to our structural fiscal problems. If this is the best Washington can do, who among us doubts that the can won’t be kicked down to another crossroads within the next year to another voiceless generation in the future?

Clayton A. Mitchell, Sr. is an attorney in Stevensville and regular contributor to Center Maryland.
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