The National Debt - Real Solutions Could Be Doomed by a Lack of Political Will and Public Outcry

6 Pages Posted: 13 Mar 2014

See all articles by William J. Dodwell

William J. Dodwell

Consultant to Financial Institutions

Date Written: January 27, 2013

Abstract

Much has been said about the seriousness of the U.S. national debt, but political inertia and public apathy render the problem even more daunting. Debt ceiling brinkmanship and an unprecedented rating downgrade of Treasury securities have not been enough to move the needle. Baseline budgeting, sacrosanct entitlements and a body politic vested in government expansion virtually prohibit progress, especially amid the redistributionist commitment of the Obama administration. Unfortunately, elections reveal large numbers of uninformed and indolent voters amenable to massive government assistance that preclude real solutions.

The answer is simple: Electing and holding accountable officials that support substantial tax and spending reduction, as well as regulatory relief. That curative frees the animal spirits that produce economic growth needed to reduce deficits and pay down the debt. Such policy would create dislocations in the short-term but eventually yield sustained prosperity and fiscal health. Witness President Reagan’s tax cut from a 70% to 28% top rate. Consider former Senator Connie Mack’s “penny plan” that reduces spending 1% per year for six years. In the process, real spending cuts are essential, not just reductions in rates of growth.

But too many politicians and the public at large lack the interest or resolve to support this action. Some lack the understanding. Some are philosophically wedded to big government, a view encouraged by the dominant leftist media. Others see the problem as too abstract, or a Chicken Little scenario, or something we always overcame in the past and will again in due course. And more and more Americans support government subsidies out of an entitlement mindset that supersedes a desire to achieve and succeed. Without public demand for genuine fiscal responsibility, most politicians will continue to push the envelope in their self-interest. Perhaps the electorate can be persuaded through more effective conservative campaigning. Or, maybe the apocalypse has to be experienced first.

Keywords: economic growth, political will, uniformed electorate, fiscal reform

Suggested Citation

Dodwell, William J., The National Debt - Real Solutions Could Be Doomed by a Lack of Political Will and Public Outcry (January 27, 2013). Available at SSRN: https://ssrn.com/abstract=2408162

William J. Dodwell (Contact Author)

Consultant to Financial Institutions ( email )

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