Thursday, August 06, 2015

Leading GOP Candidates Stand Nowhere On US Fiscal Sanity

The first Republican Party presidential debates for the 2016 elections are happening tonight.  I am not watching them because I do not watch TV.  I tried to keep up with a couple of live blog feeds but the posts were not very enlightening.  Most of the contenders seem to be sniping in sound bites.  Politicians have little control over cultural matters but some voters insist on hearing about such distractions.  I would like to know where these politicians stand on fixing the US government's fiscal imbalances.

The Bowles-Simpson National Commission on Fiscal Responsibility and Reform laid out a plan to balance the US government's finances.  The rest of Washington, DC did not take it seriously.  Both major parties would rather use select line-items as political footballs and campaign stunts.  The signed audit statements for the federal government's major entitlement programs show them continuing to accrue unfunded liabilities.  The difficult policy choices that could resolve those liabilities grow more difficult with each passing year.

The financial markets ignore the US government's perennial deficits while our dollar is strong.  Petrodollar recycling supports demand for our sovereign debt as long as Saudi Arabia is OPEC's swing producer, and as long as that monarchy remains politically stable.  The US has not yet met Greece's fate.  The President we elect in 2016 will face the wrath of the world's financial markets if the US government is unable to stabilize its finances.  Our popular fascination with candidates' one-liners and hairstyles will not excuse us from history's judgment if we cannot get solid financial solutions from them before we give them our votes.