Alan Simpson and Erskine Bowles have launched a new website, Fix The Debt, to raise public awareness of the Simpson-Bowles debt plan.
I do feel the national debt is an issue, just an issue for 2040 if healthcare costs are not reigned in. Right now, America can borrow at negative rates when inflation is factored in (that is, people are paying us hold their money). Our debt levels are lower than most advanced nations and are a far cry below historical highs.
That being said, the importance of Simpson-Bowles is not the immanent threat of too much debt, but the immanent threat of the “fiscal cliff.” If you’ll recall, the debt ceiling debate of 2011 ended with the kicking of that can down the road and the threat of “sequestration.” Sequestration consists of budgets cuts that everyone can hate. Defense cuts and social safety net cuts are included. It is draconian, mindless, and will probably wreck our economy. The whole idea behind it was that sequestration would be so hated that it would force the left and right into a “grand bargain,” the kind that we almost had in 2011.
This is why Simpson-Bowles is so important. We must force our political leadership to pass a grand bargain this time. Simpson-Bowles is the least bad alternative to the fiscal cliff. It also goes a long way toward fixing our medium term debt problem.