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The best-laid plans

By Karl Smith

The future is not the realization of our hopes and dreams, a warning to mend our ways, an adventure to inspire us, nor a romance to touch our hearts. The future is just another place in spacetime. -- Robin Hanson

There is much to be said about the Simpson-Bowles Fiscal Commission Proposal. I’d like to start at the beginning. The co-chairs begin – rightly so – by stating their values. Front and center is the notion that:

  • We have a patriotic duty to come together on a plan that will make America better off tomorrow than it is today
  • America cannot be great if we go broke. Our economy will not grow and our country will not be able to compete without a plan to get this crushing debt burden off our back.
  • Throughout our history, Americans have always been willing to sacrifice to make our nation stronger over the long haul. That’s the promise of America: to give our children and grandchildren a better life.
  • American families have spent the past 2 years making tough choices in their own lives. They expect us to do the same. The American people are counting on us to put politics aside, pull together not pull apart, and agree on a plan to live within our means and make America strong for the long haul.

Do we have a patriotic duty to come together on a plan that will make America better off tomorrow? Is such an endeavor even wise? Strategic planning stormed on to the scene in corporate America during the sixties. However, as Henry Mintzberg wrote 15 years ago:

Planning systems were expected to produce the best strategies as well as step-by-step instructions for carrying out those strategies so that the doers, the managers of businesses, could not get them wrong. As we now know, planning has not exactly worked out that way.

While certainly not dead, strategic planning has long since fallen from its pedestal.

We should have a national conversation on what, broadly speaking, we expect of our government in terms of Social Security, health care, defense and the plethora of smaller government services. We’ll want to sketch out how much those expectations might cost, and it’s even prudent to throw around ideas about how we might pay for those things.

What’s almost surely folly is the idea that we can choose specific fiscal proposals today that will safeguard prosperity tomorrow. It’s even worse to drape such notions in the flag and the notion that our grandchildren’s tomorrow turns on whether we choose the right plan today.

Karl Smith is an assistant professor of economics and government at the University of North Carolina and a blogger at

By Karl Smith  | November 11, 2010; 10:56 AM ET
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Karl, well written column. We do have a national conversation every two years though, called elections. Just like going to the in-laws for Thanksgiving, we hate what we hear, but we have to do it anyway.

Posted by: 54465446 | November 11, 2010 11:24 AM | Report abuse

LOL a "national conversation" huh? Is there any institution in American politics right now that's set up to facilitate any kind of respectful cross-ideological dialogue aimed at concrete results? I really doubt it.

We have lots of opportunities for experts to get together to hammer out a solution that nominally reflects the concerns of all sides. But there's no expectation that any outside group will respect that process -- and in fact, the presence of experts (health policy people, climate scientists, economists, etc...) often becomes the focal point for demagogic rejection of the process.

The closest we've had to a "national conversation" is town halls full of screeching teabaggers. We don't talk in this country anymore, we just shout each other down. And tax hikes / cuts to Social Security won't be any more civil.

Posted by: NS12345 | November 11, 2010 11:51 AM | Report abuse

Absolutely true. And how can we have such a conversation if everyone persists in ignoring what is happening in terms of climate change? The facile assumption that the future will look like the present excpet we will have more people and more debt is just crazy.

I'm all for worrying what things will be like in 2030 but I think that at that point Social Security will be pretty far down on the agenda.

More important will be water, energy and food.

Posted by: Mimikatz | November 11, 2010 12:31 PM | Report abuse

I don't understand why Social Security won't heal itself in 20-30 years, after all but the hardiest baby boomers have passed away. Won't we then be back to an equitable balance of more contributing workers and fewer retirees? Why adopt fixes and age increases that don't fully implement until 65 years from now? Why not just fix what must be fixed now to get us through the boomer generation?

Yes, we sorely need clarifying and fact-based conversations that are not skewed or slanted by election season frenzy. And we need citizens who will listen, and participate, and insist on being informed by facts -- not by rumor, or by false declarations made by celebrity political megaphones.

Posted by: jpel | November 11, 2010 12:55 PM | Report abuse

a conversation requires two parties, that also requires both parties to listen to each other. that would be novel idea here in America.
right now we have one party with two sides. one side ignores the other, calls for bipartisanship and then ignores any other point of view or opinion.

somehow i think you are talking about the wrong country here.
It's always has to be "this way or the highway" for one side... for the last 40 years one side has gotten it way. Always..

so wake me up when the Republicans even pretend to care to listen to the other side. as for the Democrats, The Democrats are not even on speaking terms with their own base, they are so busy kneeling in obeisance to the The Republicans.

a conversation would be a great idea, i hope someone does that one day.

Posted by: Beleck31 | November 11, 2010 1:03 PM | Report abuse


The same point can be used to make the claim that it's folly to choose specific climate proposals today that will safeguard prosperity tomorrow. We may not be able to ensure prosperity through planning...but how about avoiding catastrophe. I think actuaries are more certain that if government finances are left on auto-pilot then we are headed for a fiscal catastrophe...than they are certain that specific policies will lead to prosperity.

I think the early release of this report is meant to start a national conversation

Posted by: Mazzi455 | November 11, 2010 1:22 PM | Report abuse

Karl, if you want to make predictions about the future, here's one you can mark down.

"1967 is remebered as the Summer of Love, but 2011 will be remember as the Summer of the Aged Revolt"

As Ben Bernanke accelerates with QE2, and maybe 3 or more, he runs right over the bodies of the SS recipients. There was no COLA in 2010, nor will there be one in 2011, because of "core inflation".

However as any consumer of energy knows, real inflation has been running much higher. Since June oil has increased $10 a barrel. In fact since the inauguration of the President, it is up more than $30 a barrel though Obama has nothing to do with the price of course, just as a benchmark. The latest reports from the Chinese indicate growing consumption on all fronts. God help us all if you increase ACTUAL demand for oil, at the same time as you devalue the dollar. You would be looking at between $4.00 and $5.00 for a gallon of gas.

The climb of wheat has been even more stark. It was around $5.00 at the beginning of June, and is at about $7.00 today.

While consumers have felt higher prices at the pump, and gas will probably be $3.50 or more by summer, retail food has not had the same rise. Because of the economic climate, food retailers, have not been passing along their increased costs to consumers. Many of them in their most recent earnings season forecasts have indicated that they now must raise prices.

So old people are going to wake up in late spring and realize that the real inflation is eating them alive with no relief possible until January 2012.

Posted by: 54465446 | November 11, 2010 3:08 PM | Report abuse

Karl additional support for my above argument. I know you don't accept dares, LOL but I would love to see you address what I have written in a column.

From CNBC today:

"There might not have been a second round of quantitative easing, if Federal Reserve Chairman Ben Bernanke shopped at Walmart.

A new pricing survey of products sold at the world’s largest retailer [WMT 54.34 -0.17 (-0.31%) ] showed a 0.6 percent price increase in just the last two months, according to MKM Partners. At that rate, prices would be close to four percent higher a year from now, double the Fed’s mandate."

Posted by: 54465446 | November 11, 2010 7:32 PM | Report abuse

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