Fiscal Responsibility

Alison Acosta Fraser - Page 3

Alison also thinks Americans will need to face a tough reality; our economy is changing. "What is really hard is that we are moving from a manufacturing-based economy to a service-based economy. Many economists would argue that we have already moved there. For folks who are trained, ready, skilled and able to function and prosper in a service-based economy it's great. There are lots of opportunities. Our unemployment rate is exceedingly low (4.5% at the time... she checked to make sure). Where you have the trouble and where it's very, very difficult-and sad-is for people who have worked for a manufacturing company for 25 or 30 years. They are mid to late career and they don't have the skill set to transfer to a service-based economy. That is difficult. How do you go out and re-train yourself?"

Yet the country has weathered this type of storm before. "It's just like one hundred years ago," Alison continues. "The United States was moving from a farm-based economy to a manufacturing one. And those were painful choices for people. You had to leave the family farm and go to the city. You didn't necessarily have any skills and the same sort of basic thing is going on now. But there are community colleges, there's job training programs and things like that."

She titles her segment of the Fiscal Wake-Up Tour "The U.S. Fiscal Situation: Tough Choices Ahead." It is really what any budget boils down to whether at home, in business, or in government, as Alison stated in a recent paper she wrote called "State of the Union 2007: Fiscal Policy Challenges for Today and Tomorrow."

Balancing the budget through spending discipline, not tax hikes, is a common-sense fiscal goal. After all, families and businesses balance their budgets every day. But balancing the budget by 2012 is a pointless goal, like digging a moat around a sand castle when a tsunami is approaching. Much more is necessary. According to the Congressional Budget Office, spending on the big three entitlements—Medicare, Medicaid, and Social Security—is projected to rise from just over 8 percent of GDP today to almost 19 percent in 2050. This spending will crowd out every other program in the federal budget—including defense—and push taxes past the historical tax burden of 18.3 percent of GDP. This tsunami is not so far away either. It will start in 2008 when the first baby boomers retire and the huge tidal wave of spending that will swamp the federal budget starts to come our way.

Since Alison grew up on the beach, it's no surprise she uses tidal wave imagery to describe the nation's fiscal situation. In some ways it is also similar to the abalone she enjoyed in her childhood. It was very hard to come by, it had to be sliced thin and pounded out before it was cooked. Alison says it was a lot of work but very much worth it in the end. So too will solving our country's fiscal problems, especially if we all work together.

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Article:
  Harry Zeeve: Page 1 - Page 2 - Page 3
  David Walker: Page 1 - Page 2
  Alison Acosta Fraser: Page 1 - Page 2 - Page 3
  Belle Sawhill: Page 1 - Page 2 - Page 3
  Chris Swann: Page 1 - Page 2 - Page 3
  Carl Tannenbaum: Page 1 - Page 2 - Page 3

Recipes:   Lemon Chicken | Rachel's Omelet | Corn Pudding | Marinated Filet Mignon | Asian Pork Tenderloin and Coconut Jasmine Rice | Grilled Chicken Breasts | Steak au Poivre | Pretzel Salad | End of Spring Beef Stew | Chicken Tarragon | Roasted Sweet Potatoes | No Bowl Cake | Chris and Aunt Mary's Stromboli | Aunt Pat's Pizza Meat | Cracchiola Family Sauce | Chris's Baked Ziti | Aunt Eleanor's Spedini | Post-Thanksgiving Gumbo | Singapore Rice Noodles | Red Chili and Orange Barbecue Sauce | Tandoori-style Grilled Chicken