The Long Term Financial Situation of the United StatesJanuary 3, 2013
For all the rage and fury surrounding the recently completed fiscal cliff deal, the agreement actually accomplishes next to nothing. The long term financial picture for the nation is as perilous as ever, with serious implications for both national and personal prosperity, liberty and national security. I don’t think I am ideologically bound to either side of the tax hikes/spending cuts debate – I think we need both (the US is currently near historic highs of spending as a percentage of GDP and lows for tax revenue as a percentage of GDP). A modified version of the Simpson/Bowles plan – a bipartisan blueprint put forth by the President’s own commission – would seem to have been the best approach, but it has been completely ignored. As noted by Nouriel Roubini in the first linked article above, we have been failed by our leadership across the board. However, unlike Roubini, I think the greatest amount of blame has to go to the President. He campaigned hard for the job of leader, and has now utterly failed to lead.
Although it is now over 3 years old, I recommend reading The Long Term International Economic Position of the United States from the Petersen Institute. The situation is serious; I especially recommend the final chapter on the national security implications.