The political reality: We're going broke

Every so often, reality has to intrude on politics. The candidates, of course, resent it and do their damnedest to avoid it.

Last week, just as everyone was weighing the delightful prospect of a new administration and a new Congress – reformers all, to hear them tell it – a cold-water dash of realism smacked us in the face.

This one was administered by the killjoys at the Congressional Budget Office, who announced that the next president, whoever he is, will likely inherit a budget that is at least $500 billion out of balance – a record sum that will limit his ability to do any of the wonderful things being promised daily in the campaign.

Barack Obama and John McCain scarcely blinked at the news. I didn't expect them to. The last thing candidates want to admit is that if they win, they'll be unable to deliver the goodies they've promised the voters.

Both of them are telling their audiences that they'll outdo the Bush administration in every respect. They'll not only bring fundamental change to Washington, but deliver the big goals everyone craves – peace and enhanced national respect abroad, energy independence, more jobs, affordable health care, a cleaner environment, improved schools and, of course, lower taxes.

We must please foreign bankers

You won't hear them admit that, before they do any of those things, they'll have to pay a gigantic annual interest bill on the rapidly expanding national debt – or else our foreign creditors will stop lending us the money to pay our bills. No one will be elected on the promise that he'll satisfy the bankers in Shanghai and the money-managers in Moscow.

But that is the reality. Our country has so thoroughly abandoned any pretense of fiscal prudence, accumulating public and private debt at a breakneck pace, that no president can avoid asking: How do I keep our creditors at bay?

If this were a rational world, that question would be at the top of the agenda for the first presidential debate. It is not, because it is in no one's interest to raise it – not the candidates', for they have no easy answers, and not the media's, because we hate to be the jerks who spoil the party by asking who's paying for the booze.

But trust me, the question will have to be asked in 2009, if not in 2008. The events that have dominated the economic news – soaring unemployment, bankruptcy and foreclosure rates, government bailouts of giant financial firms – are not accidental occurrences. They are symptoms of a systemic breakdown marked by easy credit, lax spending discipline and a toxic aversion to taxing ourselves enough to pay our bills.

The balanced budget myth

The fine print in the CBO report measures the course of our reckless imprudence. The projected deficit is almost triple the size of last year's flow of red ink. In January, the deficit for this year was estimated at “only” $219 billion, and both Bush and the Democratic Congress claimed that we were on our way to a balanced budget in another three years.

The reality: A slowing economy sapped federal revenues. An “economic stimulus” bill boosted spending. Iraq and Afghanistan continued to absorb more billions. In the face of that, Bush continues to call for more extended tax cuts, and Democrats seem poised to go along.

It's unfair in a way that those who will move into new positions on Pennsylvania Avenue next January should bear the consequences of the decisions made or avoided by their predecessors. But that is the reality; economic forces do not obey election timetables.