March 27 was supposed to be the day the U.S. government shut down. But surprise! That didn’t happen as the U.S. Congress (with surprising bipartisan support) and President agreed to a stop-gap measure funding federal agencies through the September 30 end of the fiscal year.
The sequester sticks but with more agency discretion in deciding how $85 billion in automatic spending cuts are to be made. Despite earlier claims of painful effects to the American consumer (as in long airport lines), that has not happened (at least not yet).
Wittingly or not, the Ds and Rs in Congress finally caught on to Jesus’ economic guideline #7 to “settle disputes quickly” (see February 24 blog post). The U.S. Congress and President may even be catching on to guideline #2 to “count the cost” (i.e., budget in advance).
Quick settlement is the first but by no means the only step to getting America’s financial house back in order. And there is growing realization of the steep cost of doing nothing.
For Mr. Obama, the too-painful-to-happen sequester is now the law of the land, potentially threatening to undermine his 2nd term agenda. For the fractured Republican opposition, the $85 billion sequester has been like using an axe for surgery that requires a scalpel. America’s national defense is on the sacrificial alter.
There will be many more quick settlements ahead. Implementation of Obamacare must be brought under control to avoid gobbling up all available GDP. Everyone – especially the consumer – needs to have skin in the game.
Social Security needs to be reconfigured for long-term solvency – to avoid bankrupting Gen X adults 20-30 years down the road. Medicare and Medicaid need to be means tested and remove incentives for needless tests, procedures and pass-through billing. With increased longevity, threshold age limits for benefits need to be raised. And we need to get over the idea that it’s ok for a sacrosanct elderly generation to rob their kids blind.
What’s the key test ahead? Well, it comes from Jesus’ economic guideline #4: “Get your fair share, no less and no more.” As Jesus is reported to have said (by the non-canonical but very early Gospel of Thomas): “Give the emperor (i.e., government) what belongs to the emperor, give God (i.e., charity) what belongs to God, and give me (we know what that means) what is mine.”
This is the pivotal balancing act in what lies ahead. Determining what belongs to:
- The emperor (i.e. federal, state and local governments)
- God (as acts of unmerited mercy)
- Me (as the fruits of my labor and incentive to keep on giving rather than taking)
My prediction: America will spend the next generation figuring out how to reconfigure this balance. The future prospects of this grand democratic experiment may well hang on the new social compact realized.
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