Over the last two weeks we have heard a lot of talk at the Republican and Democratic national conventions. Pick most any topic and chances are we heard conversation on it. We also heard plenty of blame. Plenty of what's wrong, and how our team would be better than yours at fixing it.
Yet deafening silence when it comes to our nation's spending, deficits and accumulating debt.
But this is upside down. Blame may be fun to some, but it won’t pay for an after-school program ... or an aircraft carrier. Paying for all the political promises made at conventions, and ultimately the ideas and financial commitments that work their way through the halls of Congress, is one of the most basic responsibilities of our federal government. In fact, paying for government is the one and only thing that Congress has to do every year.
Our present course is setting us up for a situation wherein Congress won't be able to pay the bills, and we’re not even talking about it.
Think of what’s occurring as a bizarre and untested science experiment your weirdest neighbor wants to try. It's never been pulled off before -- ever. It has been tried over the years in university settings, but it's never worked. But the neighbor keeps telling you it will be different for him and it's really going to work this time -- and he wants to try it on your son or daughter.
Would you do it? And if for some strange reason you would, wouldn't you at a minimum want to discuss the pros and cons first?
This is where we are as a country in trying a financial experiment and approach with debt and deficits that’s never worked before in the history of man. It could work, but history says it won’t. And being wrong on this one has enormous consequences for each one of us, for children, our country and our way of life.
The scale of debt’s growth is now dizzying. Did you know this year’s $3.7 trillion deficit has never been seen before in America? This is a crazy big number. One can’t even get one’s arms around a trillion dollars, but consider this, that $3.7 trillion shortfall is more than double what the ENTIRE federal budget was when I entered Congress in 1994.
And this is really just the tip of the iceberg.
The Federal Reserve balance sheet has exploded as it too has been throwing mountains of money at today’s threats to the economy. Its balance sheet has soared to levels never seen before as the Fed added about $3 trillion in liabilities. That's more than double the increase we saw in the 2008 financial crisis. Combining the efforts of elected leaders in Washington ( what's called fiscal policy) with what the Fed has done (monetary policy) gives you about $7 trillion dollars of economic stimulus. That's a boatload of money, and it indeed represents a financial experiment that's never been tried before. Can you imagine what will happen to the economy and deficits when this punch bowl is pulled from the party? How about the value of your home?
Indeed, if I loaned you $7 trillion to throw a party, you could probably throw a big event. Maybe even a great one -- one that would mask other things going on in your life and make it look as if all was great again for you. But when the festivities were over, life would be even tougher. No party -- and now you have to pay for it.
Washington is indeed trying something new on finances, and given it has the capacity to turn our lives upside down, don’t you think talking about it, or debating it in earnest, might be a good idea?
It's for this reason a number of us have started Americans for Debt and Deficit Reduction. This not-for-profit and non-partisan organization is committed to educating the public on the importance of this issue, and I hope you will be a part of it. Please join us. This issue is about more than our savings, jobs and economy, it's as well about the length and health of our republic and accordingly warrants your involvement. To learn more, visit www.afddr.org.
Republican Mark Sanford is a former congressman and former governor of South Carolina.
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