The president needs to compromise

imagesLet us suppose that I have given you ten dollars to spend next week. Let us also suppose that I have also said spend no more than eight dollars at Walmart and no more than eight dollars at Costco. Does that mean you have $16 to spend? Of course not. You have ten.  Well then, let’s suppose I have also told you that you may borrow up to one dollar. Now you potentially have $11 to spend for the week. If you spend it all by Wednesday, whose fault is that? Don’t come whining to me that I should have given you more. And don’t dishonestly allege that you need the money to settle the bills I have already run up. I never told you to spend $16. The eight dollar limit at each store was just one of the constraints you faced. The total you had available to spend was another. If you can’t keep within those constraints, that’s your failing, not mine.

Obviously, the US federal budget is more complex than this. For one thing, there are some budget headings – entitlements such as Social Security and Medicare, for example – where the law does require the president to spend money. However, the general understanding of a budget is that it sets maximums, not minimums. The executive branch has some discretion, but only within the law. The Constitution requires the president to service the national debt. Entitlements must be paid. But other areas of government can be shut down within the law. And when the laws of US and those of mathematics combine to determine that there is no money available, that is what must happen. The president created this mess by spending money he didn’t have. It is a bit rich for him to blame Congress for this situation now.

Now, there is a case for saying that if government spending his cut so drastically as to wipe out the deficit – which is what happens if government no longer has the authority to borrow money – this will have a drastic effect on the economy. It certainly cuts gdp, since gdp includes (most) government spending. How much effect that has on the real economy – given that the definition of gdp is largely meaningless – is more debatable. Okay, then there is a problem. To solve that problem will require compromise. Unfortunately, the president has declared that he will not compromise. He prefers to engage in fear-mongering hostage analogies than to agree with Congress how to get out of the hole he has dug.

The laws which constrain the budget are not wholly of Congress’s making. The president signed the budget into law. He also signed the debt limit. If he believed that these constraints were too stringent, he could have campaigned in last year’s election for higher taxes or more borrowing. He didn’t. He just decided to spend money as though those changes were already in effect. What does it say about his integrity that he didn’t advocate higher taxes or borrowing before the election, but now believes they are essential? He knew last year what the tax rates would be. He had projections of total revenues and total borrowing. He spent in excess of those levels. He needs to take the lead in compromise to get America out of a mess that is entirely of his creation.

Quentin Langley is a Senior Lecturer in Marketing at the University of Bedfordshire Business School as well as a freelance columnist published in the UK and all parts of the US. He blogs on social media and crisis communications at brandjacknews.com

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