AUTHOR: Scott Bittle, Senior Fellow, Public Agenda
Nov 08, 2011

People have trouble dealing with the inevitable.

You can see that in our personal lives and our political world, and one of the prime examples is the federal budget. In The New York Times this week, economics writer and Washington bureau chief David Leonhardt noted the common themes between the financial struggles for governments in both Europe and the United States.

Most voters in these places have yet to come to grips with the notion that they have promised themselves benefits that, at current tax rates, they cannot afford. Their economies have been growing too slowly, for too long, to pay for the coming bulge of retirees.

The fact is that the fiscal problems facing the United States (and other countries) should not have been a surprise. Yes, the Great Recession has made deficits worse. That’s unavoidable, and arguably desirable, if you’re an advocate of Keynesian economics.

But if the Great Recession was the only factor here, our situation wouldn’t be that bad. We’re facing long term trends of a population that’s getting older and a health care system that’s ever more expensive, and those are the real reasons why the federal budget is in trouble. The government’s financial regulators may have missed the developing world financial crisis, but the government’s accountants have seen the nation’s fiscal problems coming for years.

This isn’t a problem that’s going to go away once the Great Recession is over. Nor is it something where you can put all of the blame on political leaders. It isn’t their fault that the population is getting older or that health care inflation rises twice as fast as overall inflation. You can blame politicians for failing to deal with these problems, but they didn’t cause them. These are big social trends that didn’t start overnight, and they won’t just fix themselves.

Sometimes people argue that if the economy grew faster we wouldn’t have a budget problem, and unfortunately that’s not true. Yes, as the economy grows bigger our budget problems get smaller, because the government takes in more tax revenue. But the Committee on the Fiscal Future, along with other experts, concluded that trends in aging and health care are going to move much faster than the economy. In fact they said this in the first paragraph of their report: “No reasonably foreseeable rate of economic growth would overcome this structural deficit.”

In the end, it comes down to some basic questions about values: how do you want to deal with these trends? You can pay more to the government, or you can get less from it. There are lots of different options for answering those questions, and since they affect the paychecks and benefits of every American, those choices need to be made by the public, not just by politicians.

You can’t blame our political leaders for the inevitable trends. But you can blame them for failing to present the choices to the public in a way that lets people decide what’s acceptable when it comes to coping with the inevitable.

Scott Bittle is a senior fellow at Public Agenda, a partner in Choosing Our Fiscal Future. With his colleague Jean Johnson, he’s co-author of “Where Does the Money Go: Your Guided Tour to the Federal Budget Crisis” and “Who Turned Out the Lights? Your Guided Tour to the Energy Crisis.”