This has been a very tough four years. We’ve endured the bursting of the housing bubble, the subsequent Wall Street meltdown, a dramatic reduction in consumer spending, severe contractions in industry and employment, and an ongoing foreclosure crisis. Our country is still struggling to right itself.
And, like a perfect storm, at the same time that large pieces of the private sector — housing, corporations, banks, and insurance and mortgage companies — were facing performance crises, the government was caught in an unhealthy, unsustainable financial condition.
Though the crisis in the private sector is not wholly unrelated to the crisis in the public sector — for example, was there too little regulation or too much? — nonetheless, either sector is free to perform honestly and superlatively despite shortcomings in the other.
But although private enterprise is slowly stabilizing, and although most private sector financial indices are moving in the right direction (at least partly in response to helpful government policy), government revenues and expenditures and future commitments are insufficiently coordinated and — taken as a simple math problem — pose an enormous challenge as we take the measure of what will be required, eventually, to bring revenues and expenses into rough balance. And longer-term, to slowly reduce the national debt of $17 trillion.
Those who believe in the American government as a mostly positive force (and I do) and believe in the unique tasks that it can achieve, and the unique, indispensable role it alone plays in our democracy — vouchsafing the values and aspirations of an egalitarian society — have the biggest reason to hope that Washington’s politicians can successfully fashion a rational, compassionate, fair, “grand bargain.”
It is a mammoth task. A “grand bargain,” which you’ve heard President Obama, Congress and any number of special commissions talk about, would be a 10-, 20- or even 30-year plan that provides support to those who need it, facilitates the things that the private sector does best, funds the obligations and agencies of the government, and makes sense economically; that is, it would create a sustainable financial course with respect to revenue, expenditures, program costs, inflation and myriad global realities.