What's Next?

The media are full of reports that the government is now funded for the balance of the fiscal year. These reports are misleading - at best.

The real situation is that an agreement has been reached on the general contents of such a bill. To enable the real bill to be written, yet another short term Continuing Resolution, expiring on Thursday at midnight, was passed. While it is probable that the bill will pass the House, it will likely only be on a close vote. Many Democrats believe that the cuts are excessive and will vote against it while a significant minority of Republicans (of the Tea Party persuasion) are unpersuaded that the cuts are sufficient.

The Tea Party Republicans are right that the outcome is disappointing but they would do well to accept the half loaf of bread and move on to more important issues.

Our country has two critical financial situations facing it. First, a possible default on our debt if the legal limit is not increased and, second, the need to adopt a budget for 2012 which includes a comprehensive and credible medium term strategy for balancing the budget and beginning to pay down the debt.

If the Congress and the President fail at the first task, we will have to ask which of these ugly consequences will occur:

• Prolonged high unemployment?
• Wage and salary cuts?
• More reductions in the value of homes and financial assets?
• Loss of ownership of American companies?
• Price inflation?
• Higher taxes?
• Reductions in government services and benefits?
• All of the above?

Most likely we will suffer all of the above and, if we thought that the Great Recession was ugly, just wait. If they fail at the second task, then the ugly consequences described above will merely be delayed for a year or two.

Meanwhile, at the end of this week, ignoring the fact that the United States will reach its legally permitted limit on the issuance of debt by approximately May 16, members of the House and Senate will leave Washington for two weeks to engage in what is laughably described as a District and State Work Period.

Can anyone in the House or Senate spell V-A-C-A-T-I-O-N?

What are these people are thinking? Are they even thinking at all when they engage in this hypocritical self indulgence at such a time of crisis? Where is the outrage? Where is the political firestorm? Why do we tolerate such behavior from those that were elected to lead and to manage the affairs of our nation?

If we, the People, do not act we can be sure that we have exactly the government that we deserve.