US struggles to get off wrong track

Opinion: April 26, 2012 at 12:00a.m.

By Peter Goldmark

Newsday

In a Reuters/Ipsos poll released this month, 60 percent of Americans said the nation is on the wrong track. And it’s not the first poll to tell us that. We Americans are wondering again whether we’re in a state of decline — and whether it’s permanent or temporary, profound or superficial.

It’s a gloomy subject — but a healthy discussion to have six months before we elect a president.

The facts are not pleasant. Real family income for about 70 percent of the population has been broadly stagnant for 40 years. That’s grim — especially when you consider that just to stay in one place, many families went from one wage-earner to two during that period. At the same time, our society became much more unequal. Whatever long-term uplift there was in the economy went overwhelmingly to the wealthiest, rather than to average folks.

While we have vibrant technology and venture capital sectors, we’ve lost a lot of manufacturing. Our bloated financial services sector produces churn, debt and derivatives — but not always value. Our public school system is second class, and restrictive post-9/11 immigration laws strangle the inflow of foreign talent that was such a great strength throughout the 20th century. The health-care sector is technologically modern, but costs are out of control, and the health of our citizens is poor compared to other developed countries. Meanwhile we’ve built up an enormous national debt, and state and local governments are laying people off.

Tide of history

We are still the richest and militarily most powerful nation on Earth. But some observers think the tide of history may be running against us. The longer we go without reforming our out-of-control entitlement programs and raising more revenue to balance the budget and reduce debt, the more vulnerable we become to external shocks or even malicious interference — such as a cyberattack, mass sell-offs of the dollar by speculators, or a rerun of that amateur and risky soap opera called “Who’s Afraid of Default?” staged by the House of Representatives last summer.

Our real problem isn’t decline, it’s paralysis. And the first step out of paralysis is to tell it like it is. But no one is doing that.

Everybody wants to do something about the deficit. What does Mitt Romney propose on taxes? He says he’ll cut taxes for everyone — and thus increase the deficit drastically. The loopholes he says he’ll close to help offset lost revenue barely equal one-tenth of the increased deficit. These are not the words of someone interested in mobilizing support for a realistic plan.

What does Barack Obama say on the same subject? His plan lets the reckless Bush tax cuts on the wealthiest expire — that’s good, but not enough. He also relies heavily on eliminating unidentified loopholes for part of the deficit reduction he says his plan will achieve. So his “plan,” too, is built in part on hot air.

Obama’s approach is more responsible than Romney’s smoke screen. But neither candidate acts like someone seeking to build a broad public mandate for serious action. Their words seem intended to please the crowd and avoid leading us through a serious thought process about what the country needs.

Whether President Obama will address our challenges frontally and powerfully as the campaign unfolds remains to be seen. And everyone wonders what sketch Romney will etch once he exits the Republican nomination process. Will he say anything realistic and constructive about the economy, the budget and growing inequality? So far, it’s all been cotton candy for the extreme right wing of his party.

Mindless slogans

Maybe we’re too divided to accept a real debate with tough but realistic alternatives. Maybe we’ll be happy to hear a few mindless slogans and then trot off to vote. If that’s the case, then those who say we’re in decline will have a solid point. Because without a serious debate and then a mandate for action, our present gridlock is virtually guaranteed to continue.

Peter Goldmark, a former budget director of New York State, is a member of the State Budget Crisis Task Force co-chaired by Paul Volcker and Richard Ravitch. He wrote this for Newsday. Distributed by MCT Information Services.