Deficit Growing, Candidates Politicing, and Everyone’s Calling Shotgun
By Jim Tighe on Wednesday, September 26th, 2012
I’m not sure if “politicing” is used appropriately as a verb (kind of like “efforting”), but it seems accurate for what is happening these days around the deficit. On the positive side, the media is continuing to publicize the deficit as the major issue for the candidates to address. But in this case, “address” is not what’s happening… “politicing” is.
The New York Times wrote that the deficit for this fiscal year will be over $1 trillion for the 4th year in a row. Not surprising, but definitely very disturbing. Our country is fiscally in a very bad place with no clear choice on who or how to best address it.
Robert D. Reischauer, a former head of the Congressional Budget Office (the authors of this outstanding non-partisan report), stated “The proposals by Romney are politically unachievable, and the president’s proposals, while achievable, are too modest.” This seems to be the general consensus of many independent analysts.
Over the next 10 years, the CBO estimates the debt would grow from 73% of GDP to 77% under Obama’s plan while the Committee for a Responsible Federal Budget, estimated it would grow to 86% under Romney’s plan (just 10 years ago, the debt as a percent of GDP was 33%). According to the New York Times article, most analysts believe the debt should not exceed 60-70% of GDP. Another way to put that in perspective, today we’re only one color away from Italy and Greece on this handy deficit to GDP interactive map (who knew such things existed).
So thinking about the two candidate’s rhetoric on the deficit issue (while maintaining my “politically agnostic” stance), I’ll repurpose an environmental quote by David Suzuki, and say “we’re in a giant car heading toward a brick wall and everyone’s arguing over where they’re going to sit.”
Allow me to digress for a moment… Why do I (and in turn EWI) care about all this so much? Steve Blank wrote a great article in October, 2012 Inc. magazine (a really great read and stupid-cheap if you subscribe) about government spending and the economy. Steve’s 3 points are spending on entrepreneurship programs spurs innovation; funding incubators and accelerators drives commercializing that innovation; and providing tax incentives to angel investors helps further promote that innovation. Simply stated, innovating and putting America’s innovation into practice. THIS IS EXACTLY WHAT EWI DOES EVERYDAY FOR OUR MEMBERS! Our engineers are innovative, yet grounded in the goal of transitioning technology into production; our Associates are thought leaders, yet practical enough to complete projects within scope and on budget; our technicians are creative in their approach, yet passionate about the details.
I’m not proclaiming EWI can single-handedly steer the car back on course, but I am stating that investment in transitioning innovation into practice in order to create a stronger manufacturing base and robust energy infrastructure should have a significant place in the discussion of deficit reduction.
As I wrote about a few weeks ago, the U.S. is like the family that has racked up $232,000 of credit card debt while bringing home a $50,000 a year paycheck. Rather than changing our ways, we’re deciding what new car to buy, putting the down payment on that 3rd vacation home, and heading to Macy’s to refresh our wardrobe… all the time talking (i.e. politicing) about clipping coupons.
Next thing you know we’ll be arguing who’s sitting shotgun.
What do you think? Is the status quo ok or are we heading toward a fiscal brick wall? Post a comment or send me an email at email@example.com or give me call at 614.688.5064.