Our Economic Problem in a Nutshell is Ignorance and Leadership Failure

link here to article

A recent public opinion poll reveals disturbing facts about the public's understanding of many issues that impact budget decisions that have to made today and in the future. One of the reasons for the public's confusion is a lack of leadership in Washington. Neither party wants to face the most difficult issues.

The GOP plan is to reduce budget deficits by cuts in discretionary spending. For example, they plan to cut the budgets of programs like the EPA which they do not like. The public is against cutting the EPA budget by 2 to 1. The GOP healthcare strategy is to replace Medicare with a voucher plan. That plan is opposed by 76% of the public which does not want changes in Medicare. The GOP is in a pickle because Medicare must be cut by $1 trillion and Social Security must be cut by $1.2 trillion over 10 years if tax revenues are not increased. The public supports the GOP's efforts to keep taxes low. About 61% of the public agree that taxes should not be increased. The public also supports the GOP plan to cut some aspects of discretionary spending. For example, 70% believe that cutting foreign aide would have a big impact on deficits. Foreign aide is 1% of the federal budget. Even large cuts would have little impact on the deficit. The majority of the public (53%) also agree with the GOP that cuts in government spending will increase employment. In fact, cuts in state and local budgets have led to large cuts in government employment. Private industry does not make employment decisions based upon cuts in government spending. Moreover, in England the conservative government's fiscal austerity plan has led to a decline in business confidence which does contribute to employment.

In general, the majority of the public favor Obama's approach to the economy over the GOP approach. Perhaps that is because Obama's tax plan is raise taxes on the wealthy, which a majority support, while retaining the middle class tax cuts. This is a problem because raising taxes only on the wealthy don't substantially reduce deficits. On the other hand, they do not support government mandates in the healthcare reform bill. Without mandates the plan does not work. That means that the healthcare cost reduction aspects of the plan will disappear as well.

The depressing conclusion is that our politicians and the media have done a poor job of informing the public about the hard choices that must be made. Part of the reason is that there are real differences of opinion between the two parties but another reason is that both parties understand that the public would like to retain most of the benefits that they receive from government but they don't want to pay for them. Instead of trying to lead and inform the public they have taken the path of least resistance. Leadership is a dirty word in politics.