It is tempting, given uncertainty about the future, to discount the problem and hope that it will diminish, if not go away. People can use the lack of precision inherent in all projections to deny troubles ahead.
When faced with immediate pain and uncertain gains, the natural and perhaps rational reaction is to do nothing, to delay. In the case of an unsustainable U.S. fiscal policy, the costs of delay are not immediately obvious. They are insidious, and the time in the future when remedial action becomes unacceptably painful or no longer possible cannot be pinpointed. Moreover, a potential signal of unsustainable policies—higher pricing of U.S. Department of the Treasury borrowing to finance current spending—may have been masked during the recent downturn by the market’s perception that alternative investments are even riskier. If so, interest costs could increase before policy makers have had time to act. As described in Chapter 1, increased interest costs could lead to escalating problems: first, crowding out or forcing abandonment of other government functions and priorities as interest payments swallow greater shares of the federal budget; and later, decreasing wealth, slowing growth, and reducing future standards of living.
Even if everyone becomes convinced today of an urgent need to act, differences in values and perceptions of what government should do and how to pay for it would constrain possible agreement on what to do. Policy disagreements are bound to be intensified by the need to limit what government will be able to do in the future. The likely unwillingness of many to consider the interests of future generations—perhaps because of profound disagreements regarding what those interests are or what sort of government should be bequeathed to the future—will complicate choices.
Reaching agreements to minimize and share the inevitable pain may require a change in political culture toward less partisanship, more openness to compromise, and more trust and honest communication between people and their leaders. To the extent that compromises can be found and choices can be made that allow public resources to be used more productively, the needed policy changes can be a positive sum game. But to the extent that some government programs will be eliminated or scaled back, it will not be a net gain for everyone. To forge agreement on a plan that moves the budget to a sustainable path, attitudes and practices will have to change. Realistically, such changes will take time. The committee recognizes that at least some delay in fully responding to the nation’s fiscal challenge is likely, although we stress that delay means the challenge will only loom larger.
In sum, tackling the fiscal crisis is perhaps the toughest kind of political problem. Given its characteristics, quick, decisive action to put the nation’s budget on a sustainable course may be improbable. Yet if action is not taken in the near future, the nation will face a calamity, and the possible actions will be fewer and far more disruptive than what is now possible. Thus, now is the time to debate alternatives, to choose, and to act. If this