Habits of consumers and elected officials are destructive.
Paul Volcker, former Federal Reserve Board Chairman, recently published an op-ed in The Washington Post that should concern any American who does not wish a return to the 1970s, when our country experienced soaring inflation and unemployment. His message is that our country again is “skating on thin ice” due to the deficits wracked up by our Federal Government’s overspending and the imbalance of imports over exports. He noted the American unwillingness to save money and the Congressional unwillingness to exert fiscal discipline. Volcker said we either should act now or face a return to the recession and inflation of three decades ago.
When someone with Volker’s expertise speaks his words are not to be taken lightly. Volker has indicated that the best action to forestall high inflation and recessions — so-called stagflation — is that policymakers have the courage and foresight to take the necessary actions. Nothing “unorthodox” or “arcane” need be attempted, merely the exercise of simple fiscal discipline. He asserted, “What I am talking about really boils down to the oldest lesson of economic policy: a strong sense of monetary and fiscal discipline. This is not a time for ideological intransigence and partisan posturing on the budget at the expense of the deficit rising still further.” What he suggests is best encapsulated by the adage that one should not put off until tomorrow what can be done today.
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