Two debates into the final stretch of the 2012 presidential campaign and I amazed at the ability of both candidates and the media to dance around what in my opinion are the primary issues of this election.
First let’s get it out there; I know this election is supposed to be entirely about jobs. But liberal or conservative, we all know the federal government, particularly the president, doesn’t really create jobs. Sure, according to the U.S. Office of Personnel Management, the government itself does employ a staggering 4.4 million people, but those aren’t the jobs I am talking about (and neither are the candidates).
The jobs the electorate is interested in are the private sector jobs created by the “real” economy. So by this logic, if the president doesn’t actually create jobs, neither can he be held entirely responsible when jobs are lost. Despite all the time spent politicizing employment trends, the reality is that the president does much more presiding over these trends than creating them.
The president does, however, have considerable influence on how the government operates and on government policy during his term. In this regard two major issues are being continually neglected in the campaign rhetoric and debates.
Over the short-term, the major economic/government issue hanging over our economy is the so called “fiscal cliff."
The term fiscal cliff comes from Federal Reserve Chairman Ben Bernanke, who used it to describe the peril of what will happen should the automatic tax increases and massive spending cuts already legislatively scheduled are allowed to take effect on Jan. 1.
By some estimates, these legislative changes could cause as much as a $700 billion drag on our economy, which would likely cause us to slip back into recession.
Pretty important stuff, and something under the direct influence of the president. Heard a plan? Neither have I.
The other intermediate term economic/government issue is the national debt. Notice I didn’t mention the deficit. The deficit refers to the annual operating budget of the federal government, and the national debt refers to cumulative value of all previous deficits. Although the deficit is the issue candidates like to debate, it’s the national debt – all $16 trillion of it – I believe is coming more and more to define our ongoing economic reality.
Nations with our level of debt have serious challenges. Two developed economies have reached debt tipping points ahead of us: The Japanese, with 30-plus years of no economic growth, and the Southern Europeans, with austerity riots and deep social pain.
The next president may very will preside over our debt tipping point; maybe hoping for a solution is too much at this point. Is it to much to ask, however, for a candidate to show they are at least aware of the problem?