Business

It’s unsustainable, stupid.

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This graphic compares U.S. debt and deficit with the dysfunctional Eurozone economies.  Interesting to note that only Greece is worse than the USA and we tie with Ireland vis-a-vis the dual metrics on the chart. Other than that, we are worse than all of industrial Europe.

If politicians and policy makers across the political spectrum agree that our fiscal debt situation is unsustainable and potentially catastrophic (which they do) – should this not be the critical issue to debate in this presidential election?

In the 1992 presidential campaign, James Carville’s motivational meme “It’s the economy, stupid.” perfectly encapsulated the key issue of the election. The beauty of the exhortation was that it focused the Clinton campaign staff on the one issue that could and would make a difference in the electoral outcome. He correctly identified the single most important issue on the minds of the electorate and it also exposed the single greatest weakness of the George HW Bush administration. The Bush campaign seemingly never understood what the election was really about. They touted foreign policy triumphs and their consequent lack of focus on the domestic economy reinforced the perception that President Bush was out of touch with American voters.

In every election since, campaign strategists, analysts, pundits and bloggers have attempted to reprise Carville’s insight with a similar construct for the election at hand. Your loyal blogger is no exception.  In 2006 and 2008 I was convinced the election was about one thing:  “It’s the war, stupid.”   True enough in 2006. Not so much in 2008.  In 2008 “It’s George Bush, stupid.” was enough to win the election for Barack Obama. Even though GWB was not running, it was sufficient to tar McCain with that brush. The public sentiment was to punish GWB and the Party he rode in on.  2010 was a different story.  In 2010 – “It’s the spending, stupid.” carried the day.

Which brings us to 2012.  After winning a battle, generals are reluctant to abandon the very tactics that prevailed in a victorious campaign.  Despite the setback in 2010,  Axelrod and the Obama campaign strategists continue to fight that 2008 war in 2012. It’s a mistake. Things have changed. Today there is a far greater awareness and focus on our profligate and unsustainable deficit spending.

Submitted for your consideration, the 2012 Carville election snowclone:

Let’s review:

Our Total debt and Annual deficits are unsustainable:

Overall spending and borrowing are unsustainable:

Medicare and Medicaid spending are unsustainable:

US Defense spending is unsustainable

… and unconscionable:

These charts reveal nothing new. We’ve been on this path for decades. The GW Bush administration made it worse with a new trillion dollar war and a new trillion dollar prescription drug entitlement initiated during their four years of One Party Republican Rule.

The first two years of the Obama administration made it much worse with two new trillion dollar spending programs passed in just two years on on two purely partisan votes under One Party Democratic Rule.

“Unsustainable” is on the mind of the American electorate. Watching the fiscal meltdown in Greece and Italy and Spain and Portugal have put it on the front burner for this election.  This is not where we want to be, yet our leadership in Washington D.C. continue to walk us down that primrose path.

Time is up.  Time to move from  “unsustainable spending and debt” to “sustainable spending and debt”. This should have been crystal clear to the Obama administration after the midterms.

The Simpson-Bowles President’s Commission on Deficit Reduction was a perfect opportunity for President Obama to take the lead on this issue. He let it slip away. Now here we are, two years later, and the Obama campaign seems to think the most important items on the minds of Americans are Romney’s tax returns, Bain Capital, whether Romney is too rich to be president, and whether 1% of Americans don’t pay enough taxes. None of which does anything meaningful to address the fact that we are trapped on a hell bound train barreling at high speed toward a cliff of fiscal oblivion.

You may not like the Romney/Ryan plans for dealing with our unsustainable spending, debt and entitlements, but at least it is a substantive plan and they are willing to talk about it during this campaign. If the Democrats and the Obama administration have a sustainable fiscal plan for the United States government I don’t know what it is, and they sure seem reluctant to talk about putting anything meaningful on the table. The easiest thing for the President to do would be to embrace the Simpson-Bowles plan. It was his commission. It was his idea. If the 2012 presidential election comes down to a choice between a candidate with a serious plan to get us out of this morass vs. a candidate that appears to ignore it – I suspect that the man with the plan wins.

I would prefer not to see a restoration of One Party Republican Rule in 2013, but that is a real possibility. The House is a lock for the GOP. The Senate is a tossup and could easily go Republican (although Todd Akin is trying his best to ensure the Democrats keep control). The best chance for avoiding a Republican sweep is to reelect Barack Obama. But if the American electorate have the Eurozone failure and fiscal sustainability on their mind while David Axelrod and Team Obama are talking about Bain Capital and more spending programs, well – that makes him appear as out of touch as George Herbert Walker Bush in 1992.

And that is a real problem for the president’s reelection prospects.

X-posted from The Dividist Papers