Wednesday, January 2, 2013

Cliffhanger: Fiscal Freakout and Debt Dilemma



In Washington, it appears that the Senate, the House, and the President have come into an "agreement" on the Fiscal Cliff issue.  The Senate and the President kicked the can down the road (again) and the House begrudgingly surrenders while shaking its head wondering how this irresponsibility can persist.

I am unsatisfied with the reported results of the Fiscal Cliff deal and some in the media are blaming our process.  Yet,while this process is extremely sloppy and imperfect, it was designed by our Founders to be so.  Before we lose total faith in our government, perhaps a quote from Winston Churchill is appropriate:

 "Many forms of Gov­ern­ment have been tried, and will be tried in this world of sin and woe. No one pre­tends that democ­racy is per­fect or all-wise. Indeed it has been said that democ­racy is the worst form of Gov­ern­ment except for all those other forms that have been tried from time to time." 

When three parties to a negotiation have veto power over each other, the results will be less than perfect;  especially when they are divided ideologically and so widely as we see in today's Federal government.

Nevertheless, some lessons can be drawn from observing the political dynamics in Washington.  The House is the body that is the closet to The People.  It was designed to be that way.  With short two year terms, voters have a very short leash on their Representatives.  If the Representative goes astray, the choke chain of voter discontent makes its correcting influence known.  If he goes astray too many times, he is replaced.  Thus, The House is the closest possible proximation of The Will of the People.

Supporters of The President have said that "elections have consequences."  Thus, implying that because the President was re-elected that his agenda has a mandate.  Yet, the entire House of Representatives was elected (or re-elected) as well, and this has consequences too.

So, with each body having equal veto power over the other in negotiations, the test is then of leadership and political acumen.  Seeing the results we have gotten, it is apparent who has it and who does not.

Moving on to our next fiscal crises of the debt ceiling debate, the President's recent remarks are of a man who presumes he is negotiating from a position of strength:

   "While I will negotiate over many things, I will not have another debate with this Congress over whether or not they should pay the bills that they’ve already racked up through the laws that they passed."    
Does anyone else find these comments as insidious as I do?  Our Fiscal Cliff deal increases our debt.  The President and Senate compelled the House to pass his proposal, and then turns around and says, "You did this!  You fund it!"  This is truly disingenuous and a slap in the face by any account.  It is kindergarten playground politics: Nanny nanny boo boo!  

If the House of Representatives knows it's role, it will appeal to the people for support to reject deficit  increases and then act on it.  All of Utah's delegation including Rep. Jim Matheson (D) voted against this deficit deal except for Senator Orrin Hatch (R).  If Senator Hatch and the majority of America lack the will to stop ourselves from spending, market forces, via the bond vigilantes, will be much swifter and merciless in taking the purse away from us.  It is best we put our fiscal house in order before we are stripped and whipped by a ruthless bond market.  

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