We are in the midst of an epic standoff at the OK Corral with the President and Democrats on one side and the Republicans on the other; Republicans wanting no tax increases and Democrats shy of spending cuts. At this point, neither side is blinking. If a deal is not agreed on by August 2, 2011, the date by which the Treasury Department must raise the borrowing limit or face possible default on U.S. obligations, the country faces dire economic consequences.
I was a little surprised to see the President pushing for a larger reduction of the deficit of $4.2 trillion over the next 10 years. A larger deal, in my opinion, would be great for our long-term economic health. On the other hand, I was glad to see House Speaker John Boehner trying to work with the President to achieve this greater reduction. This reduction would send a great message to the world that we are dealing with our financial issues; it would set us apart as a true world leader. Both of these leaders, however, face strong resistance from the members of their respective parties.
The bottom line, as we all know, is that we cannot spend more than we make. I have long thought that we would be better served by having more CPAs in Congress because we are good at understanding budgets and knowing they must be balanced. Like many other countries around the world, we face tough challenges and have to make unpopular moves, but everyone will need to sacrifice to bring our budget back in line. Somewhere along the way we moved from a self-reliant country to one of entitlement and in my opinion, we need to rekindle some of that early-American spirit. There is no such thing as a free lunch.
Let’s hope that our leaders are up to the task and have the courage to do what is necessary and right this time and not act solely on their popularity within their constituencies.