This appears to be the week where everyone lays out their plan for resuscitating the floundering American economy. President Barack Obama will delineate his plan of action tonight, the leading GOP candidates discussed their solutions last night, and Mitt Romney came to Las Vegas on Monday to lay out his own course of action. So to speak.
The president will not enunciate any bold new initiatives tonight, nor demand that we make any significant sacrifices. Instead, he apparently will opt for what is politically palatable and call for a further reduction in the Social Security payroll tax and other reductions in business taxes. He will propose putting significant federal dollars into building and repairing roads, rails and other infrastructure projects, and provide more aid to states to avert further teacher layoffs.
Former Massachusetts Gov. Romney, for his part, proposes dismantling much of the regulatory structure that he believes hamstrings businesses, backs more domestic drilling for energy resources, and wants to lift many environmental impediments. So far, Texas Gov. Rick Perry has focused more on praying, but that hasn't done a lot of good in stopping the rampaging Texas fires. He will also likely call for no new taxes, but it will be interesting to see what he would do about the onerous franchise tax he got passed in the Lone Star state. Some are also wondering how the governor of a state he has said is considering seceding from the Union proposes to become that Union's president!
Other experts have called for more innovative approaches. Barry Bluestone recommends a freeze on public-sector wages and benefits in exchange for no layoffs. He also calls for a federal guarantee for homeowners that if they buy a house, they won't suffer "catastrophic losses." Whew, that would be expensive! Lawrence Katz calls for the federal government committing "several hundred billions of dollars" to local and state governments (isn't that what we have tried?).
William Walker calls for means-testing Social Security benefits, and building major infrastructure projects such as high-speed rail, water pipelines and irrigation canals.
All of these proposals revolve around more stimulation of the economy, with money that does not exist and must be printed or borrowed. Have any of the experts or candidates called for recognizing that spending far beyond our means is what drove us into this recession? And that we simply can't embark on any more reckless rescue or "easing" undertakings? Like New York Times columnist Tom Friedman wrote yesterday, I feel it is time for a strong dose of "truth-telling." For Friedman, that means rolling up our sleeves, possibly accepting a lowered standard of living for a few years, and absorbing the pain from our past excesses. I agree. And, in the international arena, we need an appreciation that we cannot build nations where none exist, rescue failing feudal states, or depose every bad despot.
Honesty may be suicidal in politics, Friedman acknowledges. "But as long as every solution that is hard is off the table, then our slow national decline" will continue. The difficult decisions we face cannot be avoided by more drilling, easing of regulations, pumping more dollars into local governments, bank rescue programs, or additional tax cuts.
Unless we address major entitlement programs, particularly Medicare, Medicaid and Social Security, harness defense spending, reign in government employee unions and pare back compensation and benefits, we can only look forward to delaying the inevitable collapse.
Let's bite that bullet now, Mr. President.
• Tyrus W. Cobb is former special assistant to President Ronald Reagan.
