Citizens must be better educated about U.S. economic options
Guest columnist Alex Alben argues that U.S. political culture and our education system have roles to play in the dire straits of our economy. He offers some ideas for building a better, more informed national consensus.
Special to The times
Why can't we have a serious debate in America about our national economy, instead of the current situation in which both political parties engage in coded talking points in lieu of meaningful discussion? Both our political culture and educational system are to blame, but the national media landscape is also part of the problem.
To influence good policy choices, informed citizens should know this data:
• Size of the U.S. economy — $14.62 trillion gross domestic product (2010 estimate);
• Total U.S. national debt — $13.56 trillion;
• 2010 federal budget — $3.5 trillion;
• U.S. deficit for 2010 — $1.378 trillion (projected).
These numbers tell an interesting story, but you won't hear it from either Democratic or Republican leadership, because America's true economic strengths and weaknesses don't fit into their electoral agendas. First, the U.S. has the largest economy in the world as measured by GDP — China and Japan lag far behind — and this enables us to sustain high levels of debt.
The 2010 federal deficit is a record in absolute dollar terms, but represents less than 10 percent of the size of our economy. Our total federal debt, largely accumulated over the past decade, is almost the size of one year's economic output.
The second story is that our deficit is growing not only in dollar terms, but also as a percentage of GDP. In 2001, our total national debt was $5.769 trillion, or 57.4 percent of GDP, but in the past year total national debt represented 94 percent of GDP. For every dollar Americans annually produce in terms of goods and services, we have created a dollar of debt owing to someone in the world. We are not perched on the edge of an economic apocalypse, but neither can we afford to make merely symbolic decisions about our spending priorities and the scope of our social-safety net.
Yet the very mention of adjusting Social Security and Medicare formulas or raising net tax revenues begins an avalanche of vitriol and scare tactics by our elected representatives.
This isn't true in other countries. Fresh off electoral victory where dire budget proposals were debated, Britain's new leaders bit the bullet and crafted an austerity budget with services cut across the board. Yet President Obama shied away from even general budget proposals in his State of the Union speech last week.
Likewise, conservative budget "hawks" decline to address the sacred cow of military spending — ignoring the inconvenient statistic that we spend more on defense than the rest of the world combined.
Three theories explain our inability to conduct a meaningful discussion of the economic choices facing our country:
• Voters are not educated — very few people could come close to guessing the statistics cited in the lead of this article. Why don't we teach basic economics in our high schools in conjunction with math and history?
• The mainstream media are overly concentrated — our national news outlets place entertainment values over hard news, allowing politicians to frame economics in terms of platitudes. The situation will only get worse with the Comcast-NBC merger spurring further media concentration. And because Comcast is the country's largest cable operator, the recent waffle on the part of the FCC in crafting net-neutrality rules will only make the situation worse for any true marketplace of ideas.
• Internet debate is garbled — while sources for straight talk on economics exist on the Web, the blogosphere tends to cater to self-selected liberal or conservative audiences. We are missing the sources of national consensus that existed in an era when broadcasters were held to public-interest standards.
American history has shown that we can afford to ramp up federal spending in periods of stagnation, so long as we pay down our debt in good times. The Clinton budget surpluses could have continued during the economic growth experienced under the two terms of George W. Bush, but we opted instead for tax cuts while funding two foreign wars.
The economist John Maynard Keynes said, "It's better to be roughly right than precisely wrong." It's time to educate ourselves about the economic-policy choices confronting America today, because we can't afford to get it wrong.Alex Alben is writing a book about digital culture. You can e-mail him at: firstname.lastname@example.org
This column originally included an incorrect number for the federal 2010 budget.