I found this article to be very interesting. Zakaria put our current spending situation in terms I hadn't thought of before, and I think he's dead-on with his analysis.
"We are talking about cutting the budget but not actually dealing with any of the major programs that are going to be the big drivers of cost – Medicare, Medicaid, Social Security. Meanwhile, we’re cutting everything else – all discretionary spending, which is infrastructure, education, air traffic control, NASA, scientific research. So if you think about it, what we’re doing as a country is continuing to subsidize consumption – which is pensions, healthcare, all of these kinds of things – and we’re doing it not just in the budget but through very low interest rates. We’re continuing to subsidize consumption while we’re starving investment. This is exactly the opposite of what produces long-term growth. There is very strong historical data that suggests the way societies grow is by making large, long-term investments. That’s how China is growing today. That’s how we grew for most of our history. That’s how Germany is growing today. It feels like in Washington, for political reasons, the only thing that people can agree on is to cut the investment part of the budget and no one dares touch the consumption part of the budget. The net effect is that we’re subsidizing consumption and starving investment, which is a recipe for failure."
"We are talking about cutting the budget but not actually dealing with any of the major programs that are going to be the big drivers of cost – Medicare, Medicaid, Social Security. Meanwhile, we’re cutting everything else – all discretionary spending, which is infrastructure, education, air traffic control, NASA, scientific research. So if you think about it, what we’re doing as a country is continuing to subsidize consumption – which is pensions, healthcare, all of these kinds of things – and we’re doing it not just in the budget but through very low interest rates. We’re continuing to subsidize consumption while we’re starving investment. This is exactly the opposite of what produces long-term growth. There is very strong historical data that suggests the way societies grow is by making large, long-term investments. That’s how China is growing today. That’s how we grew for most of our history. That’s how Germany is growing today. It feels like in Washington, for political reasons, the only thing that people can agree on is to cut the investment part of the budget and no one dares touch the consumption part of the budget. The net effect is that we’re subsidizing consumption and starving investment, which is a recipe for failure."
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