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DAVID KRUSE

By Staff | Feb 9, 2010

The spending freeze that President Obama announced, while giving at least some political recognition of the Federal budget deficit crisis, fell far short of being a substantive solution.

$25 billion a year savings proposed is a long way from constituting any kind of comprehensive deficit reduction plan against multi-trillion dollar deficits. The reaction to the relatively small targeted budget reduction proposal was fast and typical as those in the crosshairs scream to be spared.

To make a dent in the looming budget shortfall the decibels of those voices protesting the cuts will multiply 20-30 times over.

For example, direct farm subsidy payments – gone. Senator Harkin’s conservation payments to farmers – gone. All we are going to be able to keep in agriculture is what we really need, the basic grain price/farm income safety net.

To solve the budget deficit problem and get the country back into sound fiscal condition, we are all going to have to contribute something.

While the American public is angry over the government’s finances, they are culpable in how they got this bad. It’s been a long time since any President has asked the American people to sacrifice anything. We elect Congressmen who bring home the most bacon yet then complain about the deficit. That’s a mixed message that Congress has struggled with in finding a response.

Instead of telling us what we need to hear knowing that we won’t like it, elected officials tell us what we want to hear even if it isn’t true.

The electorate says that it wants the truth from politicians but those who have taken that at face value and talked straight are beaten by some other jerk who sells the people a bill of goods. While many blame Congress for not doing the people’s bidding, that’s passing the buck.

The public needs to take responsibility for the dysfunctional Congress and the partisan divide. They have the American people sucked into their partisan combat thinking that who wins, Republicans or Democrats, is what’s important. Not a single major policy problem has been put to bed, comprehensively solved by Washington, in well over a decade.

We have unfunded entitlement programs that are going to blow up relatively soon and Congress hasn’t even agreed to agree to work on them.

\What really concerns me is that politicians like John McCain, Lindsey Graham and even Chuck Grassley who have made sincere efforts to work in a bi-partisan manner, are attacked politically from ideologues within their own party for doing so.

Congressman Steve King’s response to the Massachusetts election was that he wasn’t going to work with Democrats on healthcare at all. That’s not right. When Grassley worked with his friend Sen. Dorgan on healthcare, there was talk of a primary challenge against Grassley here in Iowa. This ideological divide that separates elected officials from working together is insanity. The last time we had a balanced budget, Congress had accepted spending controls and new programs were funded by savings. Republicans got rid of that but I don’t believe the Democrats in Congress minded.

The historical record is that when the same party controls both the White House and Congress, the checks and balances on limiting spending fail. Congress has been far more successful in thwarting fiscal austerity than it has had in disciplined adherence to it.

Fiscal austerity means that some real beneficial needs can’t be funded. That’s the hard, cold reality. That results in pain. Congress doesn’t dispense pain well at all. One plan is to form a deficit reduction commission to tackle the problem with a comprehensive solution. Congress sees that as surrendering its authority so already voted down one such proposal.

One other problem that needs mentioning is that Americans don’t like to pay taxes. Tax hikes, even on the wealthy, are generally a non-starter as a solution to the deficit crisis. Politicians know that they can’t win here. The public wants them to balance the budget without raising taxes and without cutting and eliminating their special programs. That would require a magician, not a politician.

Ironically, state finances are so bad that they depend on the Federal government to bail them out so the Federal budget deficit is just the visible portion of the fiscal iceberg with a lot more hiding beneath.

The bottom line is that this country has never faced anything as threatening as this fiscal crisis since WW II. Everyone let it happen little by little until it’s grown to the point it is going to eat our lunch. I don’t see the American public as being ready to do what it takes to conquer this challenge. It won’t be fixed by your vote for a particular political party or getting angry or focusing on whom to blame and punish. Everyone is to blame. The solution will take everyone too.

President Obama spent time in his State of the Union message telling how he feels the pain of the unfortunate. What he should have said is that while he has empathy for the pain, everyone is going to hurt and by accepting the pain we can reinvigorate America with a second wind. Our ability to solve our fiscal crisis will define our nation’s and children’s future.

David Kruse is president of CommStock Investments Inc., author and producer of The CommStock Report, an ag commentary and market analysis available daily by radio and by subscription on DTN/FarmDayta and the Internet.

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