The threat of a government shutdown last week forced government officials to scramble for consensus in the budget plan on the April 8 deadline. Talk about procrastination. At the stroke of midnight, the government had finally decided on a budget that would trim a mere $38 billion for the rest of the year. Both parties are unhappy with the extent of cuts, and the over-dramatized consensus has not amounted to significant success. Shaving $38 billion dollars from small government programs is pocket change compared to our $14 trillion dollar debt and $600 billion in stimulus money printed in the last two years. The budget cuts are like trying to shovel the U.S. out of a debt avalanche with a spoon.
The government should have pursued larger budget cuts back in 2009, and among the cutbacks, lawmakers should have cut their own salaries. Also, instead of pumping money into the stock market and banks, the government should have prosecuting the banks and investors responsible for billions in frauds and embezzlement. Why should some sectors of the workforce, like government officials and prominent bankers, enjoy pay raises every year while some unionized workers and most privately employed citizens are losing their jobs and struggling to keep their businesses open? Suddenly, now that Republicans are back in business, we realize that the U.S. can no longer support its debt from tax revenue and other people’s money through foreign debt. Suddenly, the solution to our problems is attacking small government programs and cutting back on education, public parks and state funding. Why can’t the government come to a consensus that the real cuts in spending should focus on trimming the costs of healthcare, defense and even the interest on our massive deficit?
Instead of tackling the issue of debt by cutting costs in 2009, the Obama administration has waited until deficit spending has pushed the federal debt to the legal limit. The Federal Reserve should have never become a printing press for U.S. bills that are now devaluing the dollar and causing gas prices to rise, among other things. Throwing more than $600 billion at big banks and random public projects through a “stimulus bill” is neither stimulating nor productive. If anything, the stimulus packages have massively increased our debt and reduced the value of the dollar. Aside from dealing with healthcare and military costs, the Obama administration should have immediately reduced government costs, including cutting government salaries for high paid officials. Even if cutting salaries doesn’t amount to large savings, it is a gesture toward more government responsibility and control over spending, which could boost public support.
The government finally agreed on a budget minutes before the deadline, but this fairytale-like drama does not end happily ever after. Our debt cap is currently at $14.25 trillion, and within the next month, we will have reached that benchmark. In the next five weeks, the government must make the tough decision whether to increase or maintain that cap. Once the debt hits that mark, the government is restricted from borrowing more money, pressuring the U.S. to default on foreign and public loans. What will happen if the government does not agree to raise that cap or figure out a more effective way to reduce the debt? Under pressure from both parties, Obama has finally decided to cut $4 trillion over the next 12 years. While this is a strong step toward reducing our debt, the government should continue focusing on reducing the debt in the long run and shouldn’t simply continue spending beyond its means until foreign debtors pull the plug and decide they no longer want to pay for U.S. debt.
The U.S. has practically reached a tipping point, and if the government does not stop lying about progress and start working cohesively to tackle the problem, the massive debt can quickly push us back into a recession or, worse, a long depression. If it was not already evident in the multitude of economic crises since the 1970s, it is clear now, the U.S. cannot continue living beyond its means.
Vasiliki Mitrakos is a Weinberg sophomore. She can be reached at [email protected].
