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Fiscal Problems Will Continue

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Wayne Curtis    The recent fiscal fiasco brings to mind Winston Churchill’s famous quip that “democracy is the worst form of government, except for all those other forms that have been tried from time to time.” The imbroglio that took place in Washington during the first 16 days of October, a common occurrence in recent years, represents the worst elements of democracy.
And unless drastic changes take place, we can expect to see more insanity in the future. While the legislation signed by President Obama funds the government until January 15 and increases the debt ceiling until February 7, it leaves the nation’s debt crisis unaddressed. In the words of some, this creates a permanent state of government dysfunction.
The good news is we avoided hitting the debt ceiling and risking a possible default on the nation’s debt for the first time in history.  The bad news, however, is that the deal did not provide any clarity.
The legislation signed by President Obama leaves unfinished any long-term agreement over the nation’s fiscal future. The national debt has $17 trillion, and the amount is increasing every day.  This currently represents $53,642 per person that must ultimately be repaid.
About 6.5 percent of the federal budget represents interest on the debt.  As the economy finally recovers and expands, interest rates will rise. And interest on the debt will increase.
What we witnessed in October is a horror movie that will play again – at least until after the 2014 elections – if lawmakers continue to practice “government by crisis.”   In such an environment, consumers will curtail spending, and businesses will curb investment. This will create a dark cloud over an already-sluggish economy.
From this vantage point, the drama that occurred is a national disgrace. It made this nation the focus of international concern as central banks around the world prepared for a possible default by the U.S. government.
As the politicians continue to squabble over every issue, this represents a lack of statesmanship. They act as if they have never heard of civility and compromise.
Surely there are still men and women who are willing to place the welfare of the nation above their own interests. Now is the time for them to step up to the plate.

Wayne Curtis, Ph.D., is a former superintendent of Alabama banks and Troy University business school dean. He is retired from the board of directors of First United Security Bank.  Email him at wccurtis39@gmail.com.