Zakaria: US Policy is Sad Mixture of Political Payoffs and Ideological Positioning

With the number of of government officials… and at least one mega-billionaire… taking potshots at Standard and Poor’s over the US debt downgrade, it’s appealing to hear a few more voices emerging and willing to recognize the ongoing debt debacle for what it is, and even at the expense of perhaps somehow not sounding patriotic.

Comments from the likes of Kenneth Rogoff — the Harvard economist who has referred to the downgrade as “very courageous” and “the right call” — and others, show there’s a willingness… out there somewhere… to skip the denial phase and to jump right into directly addressing ever-increasing US fiscal challenges.

Some particularly well-articulated comments came from journalist and author Fareed Zakaria. A few highlights are included below.

  • “The actual cut to the 2012 budget, the only budget over which this Congress has control, is $21 billion out of total expenditures of $3.7 trillion – a pittance. Everything else can and will be changed by future Congresses.”
  • “The manner in which the deal was produced added poison to an already toxic atmosphere in Washington, making compromise even more difficult. Democrats now feel they need to mirror the Tea Party’s tactics and are becoming unyielding on any cuts to entitlement programs like Medicare. Republicans, emboldened by the success of their bullying, have closed ranks more solidly around a no-tax agenda.”
  • “We need to pare spending in areas like health care and pensions but invest in others like research and development, infrastructure and education in order to grow. In an age of budgetary limits, money needs to be spent wisely and only on projects that are effective. But in area after area – energy, immigration, infrastructure – government policy is sub-optimal, a sad mixture of political payoffs and ideological positioning.”

The full video clip, which came to our attention via a Global Public Square post on how we’ve downgraded ourselves, follows.

The Daily Reckoning