Our Flawed Political System Is The Culprit (Vol.182)

Term Limits is the Solution

In a pamphlet published last year, Our Ship of State: The USS Titanic, I explained why our fiscal situation today is so critical and different from anything we have ever experienced. I concluded we need to do four things to fix our problem. The first item was Term Limits.

Take one look at the fiscal disaster staring us in the face. We are $37 trillion in debt

today. Multi-trillion-dollar deficits stretch as far as the eye can see. Social Security

and Medicare carry more than $100 trillion in unfunded obligations. The list goes on.

“Unsustainable” does not even begin to describe it. At some point the supply of U.S. debt will overwhelm demand, and the federal government will no longer be able to borrow at reasonable interest rates. That moment will mark the ultimate financial reckoning. It will be worse than anything this country has ever experienced. Unless we act, it is only a matter of ‘when’, not ‘if’.

How did we get here? Do our representatives not know better? Of course they do.

The problem is not ignorance or bad arithmetic. The problem is our deeply flawed

political system, which repeatedly incentivizes the wrong choices.

The Founders were part-time statesmen whose duty was to put the long-term

interests of the fledgling republic ahead of personal interests. They understood that if the federal government grew too large and too powerful it would lead to tyranny and loss of freedom. That is why they designed our Constitution to give the federal government only limited power, leaving the rest to the states and to the people.

Today we are governed by career politicians who see public office as their profession. Their careers depend on winning votes, and to win votes they promise benefits and spending that people like to receive but do not want to pay for. It is an

endless cycle. Politicians give the public what it wants today, the public rewards them at the ballot box, and the bill is left for tomorrow. Rinse – Lather – Repeat.

Our politicians are focused on the next election, not the next generation.

The public does not see the danger because the consequences are hidden in the

future. What starts as millions morphs into billions, and billions morph into trillions. Before long, the obligations are so large that they threaten the financial stability of the entire country. That is exactly where we are now.

We are in a ‘doom loop’ where the debt generates high interest, which generates

more debt, which generates higher interest – and the vicious circle continues until

the whole house of cards crumbles.

The question we must answer is what can be done to change course before it is too late.

One answer: Term Limits. This would change the incentives and eliminate the long-

term career politicians, always focused on the next election. They could and should

be focused on the long-term best interests of the country. This idea has broad

public support and some support in Congress.

The path forward to address our problems is the creation of a statutory bipartisan

fiscal commission. Such a commission, modeled on successful efforts of the past,

could put all options on the table and give Congress a roadmap for action. If

structured properly, it could provide the political cover lawmakers need to take

tough votes while reassuring the public that sacrifices will be shared fairly. And

Term Limits should be part of the discussion.

Their recommendations to be effective requires public support. To gain this, there

must be a massive, nonpartisan educational effort that presents the facts clearly

and honestly. The numbers themselves will tell the story. If people are shown the

reality of what lies ahead, most will understand that continuing the current path is

not an option. We do not have the luxury of partisan bickering or political theater.

We are not trying to fix the blame; we are trying to fix the problem. We must deal

with the facts as they are.

The problem is fixable, but only if the public understands it and demands action.

Difficult steps today can prevent catastrophe tomorrow, but those steps will never

be taken unless voters are prepared to support them. Politicians respond to the

people. If the people are prepared for responsibility, so will be their leaders.

The other recommendations in my pamphlet will be covered in future articles:

Devolving Government; Reforming Entitlements; Fair Taxation.

Wake up, America. Time is running out. If we do not, we will get the catastrophe we

voted for.

Les Rubin is the Founder and President of Main Street Economics and author of

Our Ship of State, The USS Titanic

BOTTOM LINE

There is much that needs to be done. Term limits would be a good start, but the

public must understand the fundamental problems and support change. Without

that, noting will get done.

It is up to us. We the People must get involved and support difficult political positions. Otherwise we will just keep our Ship of State steaming full speed ahead

into the iceberg.

Learn Economics., then Vote Smart.