David Wessel wraps up Seminars at Steamboat series
Speaker: Crises or leadership could save country from mounting budget problems
August 20, 2012
Steamboat Springs — David Wessel said before he set out to write it, he wasn't sure it was possible to crunch an interesting explanation of the nation’s massive but stagnant budget into a book targeted at the average reader.
The author of the recently published "Red Ink: Inside the High Stakes Politics of the Federal Budget" and the economics editor for The Wall Street Journal acknowledged Monday that in addressing the crowd at the 10th anniversary dinner for Seminars at Steamboat, he wasn't talking to the average reader. Still, that proved only a small relief as meaningful discussion about the federal budget tends to overflow just about any venue it's given, no matter the intelligence of the audience.
Wessel did what he could, however, laying out some of the main hurdles that so befuddle American politicians and, with a bit of wizardry, squeezing it all in between salad and the main course at the Sheraton Steamboat Resort in Steamboat Springs.
He explained the problems the United States faces are many and wide ranging.
Residents can turn to competing news sources and find facts to validate either side of whatever issue concerns them.
Politicians who campaign on changing Washington, D.C., often don't know what they're getting themselves into. When they arrive, they find a budget tough to actually alter given that more than 60 percent of it is spent annually before Congress weighs in, a ton of that money going to Medicare and Medicaid.
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"That never forces them to confront what has become a big part of the federal budget," Wessel said. "Health care is the single fastest growing part of the federal budget, and it's the one thing we need to figure out what to do about. If we don't figure that out, we won't solve the fiscal dilemma."
Even Americans calling for drastic budget cuts likely would wince at the real-world application of their rhetoric.
"People want more benefits from the government than they're willing to pay in taxes," he said.
Perhaps the biggest problem of all: None of it is that big of a problem, at least not now. The deficit may be soaring and it may seem like there are few good ways to fix it, but the United States has no problem borrowing money at historically low interest rates.
"The deficit today is not a problem. … As bad as things look sometimes to us, the rest of the world is worse," Wessel said, citing Japan's aging populace and shriveling economy and Europe's one-currency heartburn.
As long as that remains true, United States debt remains a good buy for foreign investors.
"We are the world's tallest midget," he said. "Economically this cannot go on, but I'm sure there were people standing at podiums like this 10 years ago saying 'This cannot go on.'"
So, how does it end? That's a topic Wessel said he's had the chance to talk over with some of the big names in American politics, and still he could only guess.
"We may have a crises," he said. "Some kind of financial market crises could end this complacency and things could start to happen. The other thing, we could have a sudden outbreak of leadership. Unfortunately, I'm not sure what comes first."
To reach Joel Reichenberger, call 970-871-4253 or email jreichenberger@SteamboatToday.com