Our government has made promises that we can't fulfill even if we raise tax rates to stratospheric levels

If I were still teaching strategy full-time, I would require my students to watch Too Big to Fail, and I would devote 2 class periods to discussing it.  In the first class, we would talk about what happens when do-gooders in Washington decide that government can do the impossible -- things like trying to make homeownership, an integral part the American dream, a virtual entitlement.  In the second class, we would examine what happens when government severely limits its options by taking on mountains of debt that it can ill afford to pay.  At the end of those classes, even diehard liberal progressives would have to admit that there are serious limitations to what government can accomplish.

Saying that our government has overreached is an understatement.  From welfare to Medicaid to food stamps to Medicare to Social Security to Obamacare to ill-conceived subsidies of various sorts to you name it, our government has made promises that we can't fulfill even if we raise tax rates to stratospheric levels.  There is no way under the sun for us to solve the deficit and debt problems we face as a nation unless we scale back those promises.  Pretending otherwise is foolish and dangerous.

There once was a time when our leaders lectured third world countries about the idiocy of taking on debt without regard for consequences.  Now they can return the favor because what we've done makes what they did look pale by comparison.  We've turned the world's largest creditor nation into the largest debtor nation in the history of the world in three short decades.  The jig is finally up, and it's time to face the facts.

Paul Ryan has made a good start at getting our financial house in order.  Predictably he's being demonized by liberal progressives in Congress, but this much is certain.  We must solve our deficit and debt problems, and time is of the essence.  Political brinksmanship may be the currency of the realm in Washington, but mistakes at this critical stage can be very costly.  They might even mean the fiscal collapse of our nation.  Are our political leaders so thoughtless that they would gamble on that possibility?  I hope not.

There is plenty of blame to go around.  Democrats and Republicans share responsibility for our financial crisis, so playing the blame game is pointless.  This is not about political parties, and it's not about haves and have-nots.  It's about averting a looming financial catastrophe that will affect every one of us unless the problem is solved.  Young and old, rich and poor, all of us have a stake in the outcome.  Is the political class up to the challenge?  We'll see, but so far only Paul Ryan and a few others have demonstrated that they actually understand the mess we're in and that they have the fortitude to do something about it.

Neil Snyder taught leadership and strategy at the University of Virginia for 25 years.  He retired from UVA in 2004 and is currently the Ralph A. Beeton Professor Emeritus at UVA.  His blog, SnyderTalk.com, is posted daily.
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