We like politics. It’s the best way to resolve differences — and the alternative is tyranny. But when positioning for the next election gets in the way of getting things done, our political leaders should look out.
Just such a warning was issued this weekend by Standard & Poor’s, the bond-rating agency that changed its long-term outlook for the federal government’s fiscal health from “stable” to “negative.”
If things don’t improve, the agency could change the federal government’s bond rating, resulting in higher interest rates and broad negative effects throughout the U.S. economy.
The reason for firing the warning shot was interesting: The economists don’t doubt that the United States has the resources to pay its debts, but are concerned that the political system may not be able to reach a necessary agreement.
The economists clearly take the deficit seriously, but describe it as a medium-term and long-term challenge. Politics tends not to look that far ahead, but politicians should take this warning seriously. A short-term political dust-up over raising the debt ceiling — something that has to be resolved in the coming weeks — might be good politics, but will do little to make any fundamental changes to our fiscal health. And posturing at the brink of default on the nation’s obligations may win a few more concessions in negotiations, but could also add to the impression that S&P has voiced, which is that our government doesn’t have the ability to do what needs to be done.
Competing views about the size and scope of government are at the heart of the budget proposals passed by House Republicans and outlined by President Obama last week.
Neither party has the ability to make its vision a reality now, but those blueprints will likely be the substance of the next election, in which control of the White House and Congress will be up for grabs.
That is a political arena and both sides should enter it and make their best case. But in the short term, intransigence over immediate issues, like raising the debt limit or avoiding a government shutdown, just adds to the view that our politics makes governing impossible, resulting in real-life economic casualties in the war of ideas.
Send questions/comments to the editors.
Comments are no longer available on this story