Financial ‘crises’ breed inter-generational warfare and misguided decisions


By Neil Gundavda, MPP ’14, Assistant Opinions Editor

In President Barack Obama’s most recent State of the Union address, he outlined an ambitious yet important plan to make preschool available for every child in America. He stressed the crucial link between early education and academic success in the future.

It’s a tough sell: The plan would be extremely expensive, and thus one that would be dead on arrival in the current Congress.

Many American families can afford to send their kids to preschool and pre-kindergarten on their own. It is those on the bottom rung of the socioeconomic ladder – the most vulnerable children in America – that cannot. The only program that comes close to targeting these particular children is Head Start.

Yet, as Health and Human Services Secretary Kathleen Sebelius laid out pre-sequester, forced spending cuts would severely disrupt Head Start and other HHS activities in early education, curtailing access to the program for about 70,000 children. It would leave an additional 30,000 children without federally-sponsored childcare services.

Head Start is only the tip of the iceberg: substance abuse programs, care for the mentally ill, Housing Choice Vouchers, AIDs testing, Department of Education programs for poor and special-needs students, and HUD’s low-income nutrition assistance program (WIC) all face cuts.

For all the talk about redistribution, this is exactly what is happening. Instead of economic redistribution, we are experiencing generational redistribution. The sequester did not touch Social Security or Medicare. We are extracting resources from the youngest segment of our population to pay for the old.

This is not to say that current Social Security and Medicare benefits should be slashed in any way, but we must enact very real changes to both of these to protect their solvency and to stop cuts elsewhere. One could point to the looming two percent reduction in Medicare payments as an example of the universality of the cuts.

However, the cuts come from payments to healthcare providers, not benefits to seniors. Hospitals will therefore have to find ways to provide services to seniors for less. This means lay-offs in support staff, nurses and hospital administrators, all normally strong jobs for the middle class.

Many forget that all these new budgetary buzzword crises – the debt ceiling, the “fiscal cliff,” the sequester – have shifted the rhetoric over deficit spending in Washington.

Over the last few years, due to crisis in the Eurozone and the torpid global economy, America has had access to historically low rates of debt financing. Although scaremongers will tell you a different story, China is not about to call in U.S. debt. There was an opportunity to grow the U.S. economy, invest in our children and put Americans back to work.

Instead, the same politicians who voted to fund two wars in the Middle East and the inordinately expensive Medicare Part D expansion changed their worldview and pointed to America’s deficit as enemy number one.

After engendering crisis after crisis, they tanked the credit rating of the United States and put the federal government in a precarious position. When all this showmanship, politicking, and fakery ends, hopefully decision-makers will open their eyes to the real socioeconomic calamities that plague America.

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