The Joint Select Committee on Deficit Reduction, also referred to as the Super Committee, has failed. This committee was created by the Budget Control Act of 2011 in a compromise to raise the debt ceiling that could have led to a technical default. It is no secret that if the deficit isn’t controlled that it will lead the US to ruin like so many other countries have found out. The committee goal was to cut a little more than 1.2 trillion dollars out of the projected deficit over ten years.
However on November 21, 2011 the committee admitted failure and this does have major implications one everybody’s lives. The goal of this committee was to help bring the United States financial madhouse into order. Nations can get away from acting responsible with their finances but this never last forever. If the Joint Select Committee on Deficit Reduction had succeeded this would have been only a modest step towards fixes the current problem. Major steps will have to be taken stop this deficit and this may mean that a crisis will be the only thing that will cause responsible actions, no surprise this is extremely undesirable. Historically if governments have the ability to control the value of money in circulation (United States does) they use debasement/inflation among other creative solutions that hurts everyone.
Public policy is affected by many factors one of them being economics. The super committee failure is largely due to politics but this does highlight a major reason how economics is so problematic. In politics large number of interest groups fight for varies goals and many of these will have varies levels of impact on people lives. If a group can show that their policy will have a beneficial impact they will hire economist and others to prove their case. Many policies are very difficult by themselves but with a thousand voices of interest groups any attempt to understand the affects or what is going on becomes that much more difficult.
Two essential parts of the field of economics consist of trying to understand what is going on and often times what will happen because of a partial policy. Lesson learned throughout history are forgotten rapidly. Without understand what or why something happened any hopes of understanding any future actions is nearly nonexistent. Our leaders will enact major policies become what sound good and politically expectable without worrying about past lessons. Unfortunately most of us have a tendency to look at only the immediate effects of a policy on only a limit number of groups. In the debt deal many focus on the immediate effects of the affect of any cuts on a program or the slowdown in the growth of the economy. Public expenders of any kind require taxes (with regulation business expenditures) that could have been spent by private people on non-politically motivated projects but this common sense wisdom was more the most part ignored.
If the costs of programs such as Medicare aren’t controlled the future finical position of the United States will require major action in a crisis where the choices become much more painful and the politicians can’t put off actions. Banners like don’t cut my X program are a strong intensive for politicians to not act but put off the responsible choices dooming futures generations to higher taxes in the future among other undesirable consequences. A rousing speech or other presentation telling everyone how it is foolish to cut spending like in this deal is foolish may be appealing but facts or facts. The United States like many other countries need to drastically cut now before they have to get creative and show the truth of what history have repeatedly shown us throughout time.
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