Put simply, the fiscal cliff debate is an illustration of staggering political cowardice. Politicians of both parties are unwilling to ask voters to pay for all of the big government promises that they made on the campaign trail. They would rather risk the country's long term future than risk losing the next election. As a former elected legislator, I can assure them that their offices are not worth the price they are asking us, the voters, to pay.
Big government is hugely expensive. Beyond the costs in money, the regulations and political intrusions of an all-controlling nanny-state government create economic disincentives. Already, the fiscal cliff debates have inflicted severe damage on the U.S. economy by magnifying an existing general sense of uncertainty. In addition, they have delayed any prudent curbs on taxation and debt, which has led to the loss of America's prized triple 'A' credit rating. Another political pantomime that exhibits a massive lack of political will and integrity will only further diminish America's leadership.
The Democrats have proposed tax increases that would drain a further $1.6 trillion out of a sputtering U.S. Economy. Breaking their agreement with their supporters, even some moderate Republicans appear ready to agree to taxation increases of some $800 billion. At the same time, they have refused to put any specific spending cuts on the table. Out of fear of taking ownership of any potentially unpopular proposals, both sides refuse to make the first move.
When America was growing ever more prosperous, politicians acted more from a sense of duty than agenda, as politics was not seen as a lucrative career path. Today it offers a substantial career accompanied by very considerable wealth and great privilege. For example, Congress has encumbered ordinary Americans in an Obama health system, which is not at all likely to deliver the promised services and low cost, while retaining their own separate and privileged health system.
Given the entrenchments created by a two party system and revolving door lobbying industry, it appears impossible to persuade politicians to put the country before their privileged political careers. The only logical alternative would be to foreclose on the possibility of re-election by amending the Constitution to require single term limits for all politicians. This would finally encourage politicians to think about something beyond politics... posterity perhaps? These decisions are too important for career politicians to make. We must send citizens to Washington instead. However, turkeys do not vote for an early Thanksgiving. As such, the institution of term limits likely will not come from within the Congress as presently constituted.
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Knowing that their politicians are abusing their democratic power and enslaving them potentially in abject poverty, it falls to American citizens to stand up for themselves. They should not demand details such as a freeze on tax increases or spending cuts, but a general overall demand for single term limits. Without cause to fear retribution at the polls, legislators could perhaps place the interest of the country ahead of their own personal careers.
Big government is the culprit. It will not be reduced effectively without term limits that will require concerted grass roots action to implement. Hopefully the resentment likely to be felt from an increasingly massive transfer of private wealth to the state can engender citizen anger sufficient to force such a change. It would provide a turning point not only for the United States but would also set an example for many democracies around the world.
John Browne is a Senior Economic Consultant to Euro Pacific Capital. Opinions expressed are those of the writer, and may or may not reflect those held by Euro Pacific Capital, or its CEO, Peter Schiff.