Former Republican Sen. John Sununu of New Hampshire tells TIME readers the Obama administration doesn’t seem to grasp the reasons for America’s debt problems — including the recent credit downgrade.
They fail to understand that methodology and debt-limit votes are far less important than our irrefutable budget shortfall. Trustees estimate the unfunded costs for Medicare and Social Security at roughly $30 trillion, yet Obama proposed a budget that contained $9.5 trillion in new deficits over the next 10 years. These stark facts prompted S&P to announce an imminent downgrade unless budget talks produced $4 trillion in deficit reductions. When the package fell short, it had no choice. Other ratings agencies have maintained our AAA status, although Moody’s has established a “negative outlook.”
What about the future? Sununu sees little evidence that the president will adopt a more fruitful course.
The most powerful antidote to such a bleak prognosis is economic growth, but the Administration remains paralyzed by a “spending = stimulus = growth” mentality. The trillion dollars spent to push “shovel ready” projects, bail out state budgets and fund other priorities is long gone. The economy is stagnant, and the debt remains.
The President has paid lip service to tax reform and regulatory overhauls that would create a stronger environment for long-term investment. But his actions tell a different story. Obama’s view of the tax code is inherently political: Whom can we hit next? Energy companies, jet owners, bankers? Instead, the question should be how to promote economic efficiency by raising revenue without trying to manipulate corporate or personal behavior. Serious tax reform, however, would take real political courage.
