August 7th, 2011
02:00 PM ET

Fareed's Take: We've downgraded ourselves

By Fareed Zakaria, CNN

We have demonstrated to ourselves, the world and global markets that our political system is broken and that we are incapable of conceiving and implementing sensible public policy.

The actual cut to the 2012 budget, the only budget over which this Congress has control, is $21 billion out of total expenditures of $3.7 trillion – a pittance.

Everything else can and will be changed by future Congresses.

What the deal does is - once again - kick tough choices down the road, this time to a congressional super-commission that will have to come up with a larger plan to reduce debt.

And it does nothing to spur growth, without which the debt will expand well above projections.

The manner in which the deal was produced added poison to an already toxic atmosphere in Washington, making compromise even more difficult.

Democrats now feel they need to mirror the Tea Party's tactics and are becoming unyielding on any cuts to entitlement programs like Medicare. Republicans, emboldened by the success of their bullying, have closed ranks more solidly around a no-tax agenda.

But the only solution to America's debt dilemma will need to involve both cuts to entitlement programs and higher tax revenues.

Congress is more polarized than ever before...and that polarization has resulted in paralysis. More than two years into the Obama Administration, hundreds of key positions in government remain vacant for lack of Senate confirmation. The Treasury Department had to handle the global financial crisis, recession, bank stress tests and automaker bailouts, as well as its usual duties, with about a dozen of its senior positions - almost its entire top management - vacant. Senate rules have been used, abused and twisted to allow constant delay and blockage.

The filibuster, historically employed about once a decade, is now a routine procedure that allows the minority to thwart the will of the majority. In 2009, Senate Republicans filibustered a stunning 80% of major legislation. Given how the chamber is composed - two Senators per state, no matter how thinly populated - people representing just 10% of the country can block all legislation.

Is that how a democracy should function?

These dysfunctions come at a bad time. The U.S. faces intense pressures from an aging population, technological change and globalization.We need smart policies in every field.

We need to pare spending in areas like health care and pensions but invest in others like research and development, infrastructure and education in order to grow. In an age of budgetary limits, money needs to be spent wisely and only on projects that are effective.

But in area after area - energy, immigration, infrastructure - government policy is sub-optimal, a sad mixture of political payoffs and ideological positioning.

Countries from Canada to Australia to Singapore implement smart policies and copy best practices from around the world. We bicker and remain paralyzed.

If, as a result of these congressional antics, interest rates on America's debt rise by 1% - in other words, if the world asks for just a little bit more interest to lend us money - the budget deficit will rise by $1.3 trillion over 10 years. That would more than wipe out the entire 10 years of cuts proposed in the debt deal. That's the American system at work these days.

For more on this, you can read my cover story in this week's TIME Magazine or Also, I invite you to follow me on Facebook, Twitter and Google+ for more throughout the week.

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Topics: Debt Crisis • Economy • Fareed's Take • Politics • United States

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soundoff (912 Responses)
  1. William

    What we have is chaos because there is no direction no standards no accountability – what we do have in Washington is a wrecking crew tearing at every program just as every American is in disagreement with each other by being polarized in one direction or the other. Where is there compromise or agreement you can't have: we the people when the people are divided. Afraid that someone has it better than you the miserable seek the company of the same and when everything is lost then everyone will be equal once again. We have lost our middleground our middle class and household is pitted against household because there are the wealthy and the poor and no in between with an economy this polarized everything stops. At some point the haves can't get any more from the have nots and without a middle class there is no buffer. The wealthy are few and the poor are many too many to have a healthy economy. Life is about living and not just getting by anymore and slavery whether by ball and chain or even by debt will cause revolution. Let them eat cake and heads will roll just as history shows intolerance to being dominated by an errogant plutocracy. How can some people stand for the right to life yet have no compassion for the quality of that life. Must everything be about profit to the point that nothing is manufactured to last long enought to pay for it. Corporations sell items for profit on credit for profit some of them items needing insured for profit. The quality of food has gone down while prices have gone up for the good food some people go to work then go home to eat an unhealthy choice of foods that is cheap and this creates a health problem that costs us all. We need standards that are etched in stone from Food to Social Security from Education to income. We need income to match levels of education so that people have incentive to learn and contribute to society. Our Government pushed us into a World economy now we see how weak we are and if the Wealthy don't contribute more in taxes to get our country in order it is they who have more to lose. The Greedy, and people who stand divided have no sustainable quality of life – their greatest hope is that those arround them are also strong. Go ahead argue let liberals bash conservatives and conservatives bash liberals and as you waist your breath the world deteriorates and errodes away under your feet because you are so sure to stand your ground. People live, people die, some people are deformed, diseased or even unable to support themself and just as the beach ebbs and wanes there are vaiables to life with the wind, the rain, the cold and the heat and the passage of time the surface of the earth and the faces upon it change. During your time here what will you do with your life. Try all you want to save yourself but in the end what can really hold on to?

    August 9, 2011 at 2:10 pm | Reply
  2. Jay

    My question for this board is this: Have all of these impassioned arguments from both the right and the left changed one single person's mind who is writing and/or reading the forum? As I see it, it appears the answer is no, precious few. If this is the case, what then is the point of writing. You are either singing to the choir or riling those with another viewpoint. Maybe I am being to cynical in regards to this question. Can someone support a counter-thesis?

    August 10, 2011 at 4:19 am | Reply
  3. TXJack

    Let see the last time that the Federal Government was almost went bankrupt was when Bill Clinton was in the White House. And now we have another democrat in office and it is happening again. Hum.

    Did we really need to have 200 thousand new government created by Obama?

    Maybe if we stopped providing aid to other foreign countries the same countries that criticize us and burn our flags and drag us into conflicts.

    We need to stop supporting Israel, the middle east, africa and all other countries and take care of business at home 1st.

    August 10, 2011 at 12:45 pm | Reply
  4. Louise

    Fareed Zakaria is one of the few Americans that actually get it. Some Americans think they can grow their way out of the debt, but another bubble if it could be generated, would just burst like the last one. People in Asia see America as an empire in decline, it is all over for America.

    August 12, 2011 at 5:12 am | Reply
  5. jeff

    I do not trust any news source. The media is bought and paid for by those secretly in power, who engineer and manipulate events and spin outcomes and tell the talking heads and comedians what to say. They study the hypnotic effect the TV and Internet has on the voting population. Most of you simply believe comedians and talking heads as “gods” and your heads bob up and down in agreement with them because they are so convincing and sincere. We are being programmed what the think and how to vote. No one does the math. Greed is evil. Greed in Congress, making every business owner a reluctant tax-collector. (Why not pay your tax directly to the government? We can trust you to be honest in your taxes right?) Greed by the welfare recipients guarantee that those persons will vote for higher taxes and politician who will protect those interests.

    August 12, 2011 at 3:34 pm | Reply
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