New York Times Leader

The lead article in today’s New York Times is titled, “Party Gridlock Feeds New Fear of a Debt Crisis.” It describes the effect of partisanship on issues of overriding national importance, such as gaining control of the long-term federal debt.

Our current system is widely viewed as dysfunctional, to such an extent that observers worry if anything can wake up our legislators to the urgency of action on long-term issues. Part of the problem involves the dichotomy between short-term and long-term actions; when legislators are concerned about the security of their jobs in the face of current elections, it is hard to convince them to take long-term actions widely viewed as unpopular.

In addition, these unpopular actions vary by party: for the Democrats it concerns cutting popular programs such as Social Security and Medicare while for the Republicans it involves raising taxes to pay for these programs. Thus, the gap between the Parties widens because their respective bases support diametrically opposed, unresolvable policies.

It seems to me that the answer lies in strong Presidential leadership. If President Obama becomes more assertive and uses the bully pulpit of his office, we may be able to make progress. The healthcare summit may prove to be effective in this respect, though it is uncertain how much can be achieved in front of TV cameras. We shall soon see.

The lead article in today’s New York Times is titled, “Obama, On Own, to Set Up Panel on Nation’s Debt.” It describes the failure to do so by Congress — the vote was 53 in favor in the Senate when they needed 60 votes — but the new commission will have no legal authority to force Congress to act.

The death of the commission in the Senate shows the hypocrisy of both parties in the attempt to get the budget under control. Democratic liberals were afraid of Medicare, Medicaid and Social Security cuts while Republicans were afraid of an attempt to raise taxes. The Democrats were also upset by the exemption of the military from the Commission’s jurisdiction while social programs remained a prominent target.

Well, this new executive commission is a little flabergasting. It seems like a waste of time because Congress will do whatever it wants in any case. Meanwhile, the President is buffeted by two opposing forces: the pressure to create jobs in the short term, involving more spending, and the pressure to balance the budget in the long term, involving less spending. His proposed three-year freeze on 8 percent of the government’s expenditures already seems to have been discounted.

Well, let’s see how the State of the Union goes tonight. I’m still upset by the refusal of the House to pass the Senate’s healthcare bill!

The lead article in today’s New York Times is titled, “85,00 More Jobs Cut in December, Fogging Outlook.” The article lists the latest economic statistics and their possible impact on the Obama administration.

The unemployment rate for December remains in double digits at 10.0 percent, and some economists predict it will get worse. For the unemployment rate to stabilize, the economy needs to add 100,000 new jobs every month to match the rate of growth in the work force.

Economists had expected a job loss of about 10,000 jobs so the current statistics are significantly worse. However, to put the numbers into perspective, at one point during the recession, we were losing 700,000 jobs per month.

The Obama administration is faced with a dilemma. The Republicans are making a lot of noise about the size of the deficit; however, the economy still needs a significant boost, and trying to re-balance the budget at this point could throw us into a double-dip recession. Paradoxically, if we do try to balance the budget, and this happens, the deficit will become even worse because of the impact on revenues.

I’m not an economist, but I recognize when we seem to be between a rock and a hard place. President Obama will have to walk a tightrope, with the Republicans trying to sabotage him every step of the way. I still think there’s hope, though. The strength of the American people, our inherent creativity and work ethic, and especially our resilience, will see us through this tunnel to the light at the other side.

The lead article in today’s New York Times is titled, “Federal Government Faces Balloon in Debt Payments.” It describes the cost of financing the government’s debt and a pending disaster as interest rates rise and the baby boomers retire.

The article notes that the current national debt is more than $12 trillion, and the cost of servicing the debt is more than $700 billion, a rise of $500 billion from last year, equal to the combined budget for education, energy, homeland security and the wars in Iraq and Afghanistan.

The unfortunate situation ultimately comes back to the recent financial meltdown and the effort of the U.S. government to avoid total disaster by passing the stimulus program. However, the surge of spending it required, could have major ramifications as the United States now tries to move back to a more normal situation.

The article notes that the government will have major difficulties doing so due to the lack of personal wealth from consumers still mired in debt, and often unemployed now, too, as well as the demands on social security when the baby boomers retire. This is also exacerbated by an anticipated rise in interest rates that will make the continued borrowing required in servicing the debt even more expensive.

Not a cheerful thought on a Monday morning, but call me an optimist, I think the United States will muddle through somehow. If any country can, it will be this one.