Some alarming facts: As of 5/12/10, the national debt held by the public is $8.4 trillion; intragovermental debt is $4.5 trillion, making the total outstanding national debt $12.9 trillion. Public debt is now 53% of GDP. By 2020, even though the GDP will have nearly doubled, the public debt will be 90% of GDP. If nothing is done, by 2040 nearly every tax dollar that is collected will go toward Social Security, Medicare, and interest on the national debt (compared to 41% now).
The Debt Issue
For the past several months I have been working on a project to frame the national debt (hereafter, the Debt) for public deliberation. “Framing” an issue for public deliberation means laying out, in public (not policy or expert) terms at least three possible approaches to a problem and the trade-offs inherent in each course of action. Each approach should tap something people hold valuable (e.g. health, respect, fairness, equity, freedom) and pursuing it will likely entail giving up a little of something else people hold valuable (e.g. more freedom for all on some matter might mean less security for some). Some ideologies pump up some values to divine heights (as Republicans tend to do about freedom) but most people, regardless of ideology, value it, too. Same goes with social justice, fairness, health.
At the beginning of trying to frame the debt issue the best course seemed to be to have people deliberate on raising taxes, cutting expenditures, or “growing” out of the problem. This framing has been tried many times. It seems obviously right, but it fails to get underneath ideological bickering. I was persuaded that this policy approach was the wrong way to go, so I switched to thinking of the Debt as a problem of concerns about greed, irresponsibility, and loss of dominance in the world economy. But this approach didn’t seem to get off the ground, either. Over a working lunch with a colleague last week, I moved to seeing the Debt differently – as a fundamental SIGN of a national inability to connect political deliberation on what we want as a country (what we think are our collective obligations to each other) and what we are willing to give up in order to meet these politically generated obligations.
The national debt is the imbalance between (1) our obligations to each other now and in the future and (2) our willingness to meet those obligations. These obligations emerge through a political process of deciding together the import and necessity of public services such as common defense, education, infrastructure, health care, pensions, and other collective goods. This political process is incomplete if the will to pay for these obligations is not developed at the same time. The debt is a measure of our collective failure to fully deliberate, to work through the consequences and come to terms with the costs of meeting our politically generated obligations.
Finding a balance will mean, at every step, connecting our deliberations about what we want with deliberations about what we are willing to give up to get what we want. The only way to stem the Debt is to insist on such a connection. This means that understanding the Debt as a political problem means understanding the need for deliberation on all aspects of the national budget.
A Problem of Political Will
Deciding on (1) our obligations to each other and (2) how much we are willing to pay for our collective obligations are both political tasks but they are not ideological ones. The debt is a problem beyond ideology. Liberals may want to increase both sides of the equation; conservatives may want to lower both. But the debt is a sign of a disconnection and acquiescence, giving liberals more services and at the same time giving conservatives fewer taxes.
As Joel Achenbach wrote in the April 25, 2010, Washington Post,
In addition to running a budget deficit, Washington for years has had a massive deficit of political will…. In the fiscal debate, the default position, as it were, is to do nothing. Debt is the grease of Washington legislation; for short-sighted leaders, it is less a political problem than a political solution. As long as the government can continue borrowing at reasonable rates, citizens can have their tax cuts and government services, and eventually the growing debt becomes someone else’s problem.”
Someone else – as in our children. Achenbach quotes Brookings Institute economist William Gale: “This is all an exercise in current generations shifting burdens on future generations. Future generations don’t vote, of course.” As for the current generation of voters, we tend to punish politicians and parties that dare to raise taxes or cut favored programs.
The deficit of political will is not just in Washington, it is throughout the public. David Leonhardt’s analysis in the May 12, 2010, New York Times is spot on. Under the headline, “Greece, Debt and A Lesson: A Red Ink Question: is U.S. So Different?”, after likening the U.S. debt situation to the Greek one, he writes:
The United States will probably not face the same kind of crisis as Greece, for all sorts of reasons. But the basic problem is the same. Both countries have a bigger government than they’re paying for. And politicians, spendthrift as some may be, are not the main source of the problem.”
We, the people are.”
We have not figured out the kind of government we want. We’re in favor of Medicare, Social Security, good schools, wide highways, a strong military — and low taxes. Dealing with this disconnect will be the central economic issue of the next decade, in Europe, Japan, and this country.”
Leonhardt cites experts who point out that (a) this isn’t a problem of waste, fraud, and abuse, and (b) it’s not even a problem of needing to cut spending. To get on the right track, we need “to find spending cuts and tax increases equal to 7 to 10 percent of G.D.P.” per year, the sooner, the better. That is now about $1 trillion, more than twice the amount of Medicare’s entire budget. Also, “the combined budgets of the Education, Energy, Homeland Security, Justice labor, State, Transportation and Veterans Affairs Departments are less than $600 billion.”
For these reasons, Leonhardt observes, the Republican call to cut spending cannot fix the Debt. Nor can the Democrats’ plan to raise taxes on the rich and reform health care. What would work, he writes, is a plan “that included a little bit of everything and then some: say raising the retirement age; reducing the huge deductions for mortgage interests and health insurance; closing corporate tax loopholes; cutting pensions of some public workers, as Republican governors favor; scrapping wasteful military and space projects; doing more to hold down Medicare spending growth.” These may be unpleasant, he writes, but they are manageable. The question is whether we are ready to make the hard choices. As Treasury’s chief economist told Leonhardt: “It’s not a matter of whether we have the resources to solve our problems. It’s a matter of political will.”
Framing the Debt for Deliberation
At this point I think we can say that the issue for public deliberation is not the Debt, per se, but the problem of developing the political will to bring down the Debt.
Should a framing of the Debt take up the level of policy detail found in Leonhardt’s plan? It could, but I don’t think this is the best way forward at this point. I think what needs deliberation is the political problem that we let debt happen, that we avoid hard choices, that we are shifting an impossible burden to our children, that we elect people who promise to give us what we want in a way that is unsustainable. The political issue of the National Debt is not a matter of taxes and entitlements but, at bottom, a matter of a broken political process.
My challenge now is how to turn this insight into a framework for public deliberation.
The introduction to the framing should lay out all the strategic facts about the Debt that show (1) the magnitude of the problem, (2) how there are no easy solutions, and (3) what kind of choices need to be made. Then it should discuss the broken political process that allows the Debt to continue to escalate. The options or choices that follow should offer three ways forward.
What would be the three or more approaches to the issue? How about these?
Approach 1: Based on widespread concerns about loss of national sovereignty (that much public debt is owned by foreign countries) and international vulnerability, focus on how to get out of foreign debt and strengthen the U.S. economy. This will involve deliberation about levels of entitlements and taxes, but primarily it will focus on investing in growth.
Approach 2: Based on worries that the political system is unaccountable, that officials are more focused on getting re-elected than on being fiscally responsible, reform the legislative process so that officials are can no longer run up deficits. Examples: Sunset requirement for all appropriations; restore the pay-as-you-go law that led to budget surpluses in the Clinton era.
Approach 3: Based on deep concern that we are saddling future generations with the debt we are running up now, start making hard choices about what our collective obligations are to each other, how we will meet these obligations, and what are fair ways for the current generation to share this burden.
I welcome thoughts on how well this framework could serve as a starting point for public deliberation on the Debt. The big question is whether this meets the need to create more public will to tackle this huge problem.
 Leonhardt quotes budget expert, Robert Greenstein: “Most of the public thinks, ‘If only the darn politicians could get their act together to cut waste, fraud and abuse, and to make tax avoidance go away and so on.’ But the bottom line is, there really is no avoiding the hard choices.”