Unless you are living under a rock, you haven’t been able to avoid the inevitable political back and forth that was an inescapable part of this past election season. Both parties have been taking shots at each other, and the debates have been vigorous and contentious. While the campaign was a bitter one, and the election a hard-fought contest, folks from both ends of the political spectrum need to come together now in the spirit of cooperation and for the good of the nation. Because we need significant financial reforms, and the only way they will be meaningful and effective is if they are passed at the highest level.
Structurally, our economy is on a long-term glide path to insolvency. No matter what your political persuasion, it’s tough to disagree with that assessment. The friction comes in when we talk about how to implement solutions. Fundamentally, there are two ways to reduce the deficit: we can raise taxes, or we can cut spending. While opinions differ on which of these is the most effective, it’s clear that we need some kind of compromise. Raising taxes has a depressive economic impact on business, but cutting spending too much too soon will push our economy toward recession—we only need to look across the pond to Greece, Spain, and other struggling European economies to see how that scenario plays out. We don’t want to wait until our looming financial crisis is upon us; politicians from both parties need to come together to address these issues. And when they do, economic realities, not political talking points, should be the lingua franca.