May 30, 2013

Balancing The National Books

Bret Stephens had an interesting opinion piece in the Wall Street Journal (28 May 2013) called "The Retreat Doctrine."

He argues that America's retreat militarily from Iraq and Afghanistan may not mean revitalization for us by refocusing on domestic issues, but rather decline by prematurely ending a war with enemies that may not have ended their hatred and hostilities to us. 

Interestingly enough, it is not just on the battlefield that we are retrenching, but on many other fronts as well, for example: economically, we are cutting federal budgets; monetarily, we are anticipating cutting the $85 billion per month bond buying by the Federal Reserve; social entitlements like Social Security and Medicare are on the butcher block, defense cuts are imperiling military programs, and employment cuts have resulted in a labor force participation the lowest in 30 years. 

While many cuts are beneficial in terms of beginning to get our arms around the over $16 trillion deficit we've accumulated and in forestalling another rating downgrade by the big three credit rating firms, it is as Stephens implies, perhaps not a sign of health and renewal, but of national illness and a retrenchment of a global power. 

I remember in Yeshiva learning (Exodus 34:7) about the sins of the fathers being visited on the children and grandchildren--3 and 4 generations--and I always wondered how could a just G-d hold future generations responsible, accountable for what the prior generations did?

But perhaps, the answer is evident here, where we cannot blame G-d for our own actions, where we live big, beyond our means, and cause future generations to pay the piper.  

When the stock market is rallying--up almost 17% year to date and about 27% over the last year, while our GDP growth is only about 2.4% annually, something is very off-Kilter. 

You can argue that retreat is renewal or you can see retrenchment as leading to decline, but either way we will be paying the national bill coming due and all our children will be on the hook for cleaning up after the party is over. ;-)

(Source Photo: Andy Blumenthal)


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