This was originally written in July 2011 as the Congress and the President agreed to raise the debt ceiling and put in place the sequestration that presently contributes to our fiscal cliff dilemma.
As the debate over the budget and the national debt rages, it would be illustrative to understand how different the opposing sides are. Liberals/progressives see the government as the solution to all big problems. The argument given by the liberal/progressive side is that in times of economic downturns the government must inject a stimulus to counter the effect of diminished employment. This is the essence of the Keynesian counter-cyclic theory produced during the Great Depression of the 1930’s. Unfortunately, this misses the corollary part of the theory which states that during better times, the government should reduce spending. Therefore, though socialists often enlist Keynesian theory for their support, they miss that he was not a socialist and did not view government as an ever-growing entity. Keynes came to prominence after World War II when he warned against the onerous conditions imposed upon Germany by the Allies, which ultimately lead to the rise of power of Hitler and the Nazis. Few in the media remember that the Nazis were the Nationalist Socialist Party of Germany.
On the other hand, the conservatives/libertarians have developed their own dogma. Though they are closer to the essential Enlightenment era document which established our country, the Constitution, modern realities and Supreme Court rulings have complicated its observation. Most Americans would agree that they support the market principles of capitalism with government safeguards. Yet, conservatives, in the words of President Reagan, see the government as the problem. I would agree with this, but it limits our ability to resolve these issues. One can take Milton Freidman’s views to the extreme and seek individual freedom, at the expense of the national well-being. His “Capitalism and Freedom” sparked my rejection of socialism, which has been surreptitiously incorporated into the basic school curriculum over the past 100 years. However, we cannot undo every aspect of the entitlement culture that has resulted during this time-Social Security, Medicare, Anti-Trust legislation, government regulation of the environment, business, and social life, and the welfare state- because the general public is not ready to abandon all these programs.
Any deal that is reached by the two sides will not address the root problem-spending more than we can afford-while authorizing more debt. The national “AAA” bond rating may not be saved by these compromises. Divided government was the intent of our founders, but it is being used by the administration to continue spending beyond our means. The country must recognize that the only solution resides in growth of the economy in the private sector. If we taxed every one whose income exceeds $250,000 per year at a 100% rate, we only raise $900 billion per year at the expense of all the jobs they create. After all, have you ever gotten a job from a poor person? The only hope for our future is to encourage the private sector. The tentative plan reached on Sunday may not provide enough savings to satisfy the bond markets. (They wanted $4 trillion at Moody’s, while this plan is half that amount.) Of course in all this wrangling, it must be remembered that we are only discussing cuts in the rate of growth in spending that results from zero based budgeting with automatic increases.
The essential American cultural distinction from European nations which dates to our colonial period is the ability of our citizens to own land or property as a guaranteed right versus the grant of use that feudalism allowed previously. Socialists do not see this point as particularly American and do not value the final clause of the Fifth Amendment. This underlies their stark difference with the conservatives. This ownership right encourages entrepreneurial spirit and risk-taking that has created much of our national wealth.
Add this philosophical difference to the political difference and you can see a difficult compromise. The Democratic Party has managed coalitions of many different liberal groups (environmentalists, abortion rights advocates, civil rights activists), while the Republican Party is organized around many conservative social, religious, and financial issues. If the cuts are real, then the result will help our future. Unfortunately, the triggers might allow for tax increases or massive military cuts during a time of war. This is only the first salvo in the battle over spending. Our Representatives must keep up the fight even as they reach agreement on this issue.
The ideological difference between the Democrats and Republicans results in stalemate. Compromise is only possible when common ground is reached. The President and the Senate, controlled by the Democrats, see increased spending and increased taxation as the means to accomplish redistribution of income and wealth. The Republican House sees wealth, property, and income as an individual right under the Constitution. Demagoguery of these differences cannot close the gap, nor ensure any solution. It is only through honest negotiation that any compromise can be reached. Sadly, the gulf is too wide to accomplish this aim.