The current meltdown on Capitol Hill comes as no surprise to anyone who’s been paying attention for the last 30 years. It’s been obvious for decades that at some point the U.S. government would be unable to make good on the promises it has made to its citizens. There isn’t enough money in the country to pay for it all.
Everyone knew it, but everyone also knew that Washington would continue to ignore the obvious until adults stepped in. Once America’s bondholders revolted, the assumption went, we would get spending under control, just as various European welfare states have in recent years. In politics, reform never comes before crisis.
Now that crisis has come. Two weeks ago, the ratings agency Standard & Poors announced that unless the United States reduces its debt load by at least $4 trillion over the next decade, the country’s credit rating will be downgraded. America’s AAA rating is a cornerstone of our security. Even countries like Luxembourg, Sweden and Denmark have AAA ratings and soon the USA won’t. A downgrade would accelerate our decline from being the world’s preeminent nation. There is no greater threat.
Washington’s response? A great bipartisan averting of the eyes. Leaders in both parties have decided to ignore the numbers and their consequences. Neither the Boehner plan nor the Reid plan cuts anything like $4 trillion from the debt. Both, therefore, assure a downgrade and a certain evaporation of American power.
You’d never know it from the noisy debate playing out in Congress and on cable news. Republican leaders in Washington have put immense pressure on rank-and-file members and conservative leaders to support the Speaker’s plan. Those who refuse face attack, and in some instances, the loss of their seats. Even solid fiscal conservatives have for the most part given up and decided to obey. “It’s not perfect,” they say of the Boehner plan, “but at least it’s a good start.”
Is it? A downgrade will mean the U.S. government pays more in interest on its debt. It will also mean that every American will pay more for loans. Cars, mortgages, bank lending — all will be more costly.
Economists estimate that a change in our debt rating could cost the country $100 billion annually. That’s about five times what Speaker Boehner says his plan will save in its first year. How is that a good deal?
And those are just the short-term numbers. There’s no law of nature that says America must remain the most powerful country in the world. We got here through hard work, innovation, a reliance on markets and minimal government intervention. The explosive growth of government we are witnessing now threatens to change this course, possibly quickly and forever.
Nobody argues it will be easy to slash $4 trillion from the country’s debt. That’s why it hasn’t been done. Nor will any attempt to do so necessarily play well politically, at least right away. People like entitlements. That’s why we spend so much on them. But there are some principles worth taking political risks for, and America’s standing in the world strikes us as meeting that standard.
Despite the rhetoric one often hears from politicians about crossroads and turning points, there aren’t many obviously defining moments in American history, nor are there many debates that in 100 years will seem even more significant than they do now.
This is one of them.
In the next five days, doing the right thing will require members of Congress to anger their own constituents, and will cause some even to lose their seats. It’s worth it. In fact, there is no choice.