09/19/2012
Some of you know that I coach my youngest son’s fourth grade tackle football team. It is really interesting to see 9 and 10 year olds deal with us coaches and our seemingly unmanageable expectations. Is it really that hard to stay low and fire off of the ball? Or how about wrapping up when you tackle? As we are constantly coming up with play calls, defensive schemes and overall strategy, we tend to be too focused on winning and at times can’t help but to look at issues in X’s and O’s. But we need to remember that it’s only a game.
Much has been talked about recently regarding the “fiscal cliff”. In short, this is the triple whammy of expiring tax cuts, tax increases and spending cuts totaling an estimated $607 billion, which is set to occur at the end of this year. Attached is an analysis of this and the likely impact on the economy (which would reduce our GDP by 3-5%). Unfortunately this is not a game.
Last month, the Congressional Budget Office said that the U.S. economy would likely slide into a “significant recession” next year if Congress doesn’t avert the tax increases and spending cuts set to begin in January. But if they are postponed for at least a year, the federal government faces the prospect of a fifth straight year with a budget deficit greater than $1 trillion the CBO said.
What is an elected official to do – especially one that wants to be re-elected? What is their next play call?
As the educated voting public knows all too well, our country is facing serious deficit issues from not making the hard decisions. We have collectively dropped back and punted at almost every chance. But this time, on fourth down, do we go for it? Can we do it now – when our economy is so vulnerable to the oncoming economic blitz? Can we let the fiscal cliff happen, or are we going to kick it away?
Whether it is our monetary policy (such as Operation Twist or the new QE3 – maybe to see QE 4, 5, 6…) or the fiscal policy, our leaders have let this go on now for too long. We need to start making the difficult decisions as a united country to cut spending and raise taxes. Both of them are hard to do, and will have an impact on all of us. Doing the former is more significant as it will have a larger impact on our economic future. However, taxes also need to be raised.
Now that Congress is back in session, this will need to be the most significant play call for them. The fight over how to address tax and spending policies has frozen Washington into political paralysis – a delay of game. Democrats and Republicans aren’t expected to begin negotiating a way to avoid tax increases and spending cuts until after the elections. Earlier, they put their best and brightest in a chalk talk to discuss this and come up with collective (and non-partisan) recommendations. They failed. Hopefully the larger body will not as well. All current signs however, point to a one year extension of the current game plan.
Most likely we will punt again – there is hardly a good offensive play call on fourth and long, especially when we only have 10 seconds left on the clock. While we don’t agree with punting all the time, this call gives our leaders more time to draw up the next offensive play that will lead our economy to scoring a touchdown, and maybe even winning the game.
Not that winning is important.
