I just got a call from a reporter at one of the major news organizations to talk about the chances for health care reform.
We both commented on the almost surreal environment we are all in. I’m not sure if my friends and neighbors are in denial or just numbed by the recent cascade of events in the financial world. Up on the Hill and in the presidential campaigns it’s business as usual when it comes to extending the Bush tax cuts, spending on alternative energy, or the imperative to do health care reform.
The reality is we are now headed down an unavoidable slope into a recession. The only question is how bad. Today, Dr. Phil told his audience to stop spending money, get their credit card debt paid off, and hold cash–"Cash is king." They are and they will.
General Motors’ stock hit a price today not seen since the 1950s because no one is buying cars–and won’t be for quite awhile.
A slowed economy means less tax revenue at a time we were already headed for a $500 billion budget deficit in 2009 — and that was before we would spend as much as $200 billion to extend all (McCain) or most (Obama) of the Bush tax cuts. (Anybody want to give odds on that?)
The next Congress and the next President are facing unprecedented fiscal challenges presuming the credit crisis starts to work itself out.
Someone recently told me an economic crisis doesn’t necessarily mean we won’t have important social legislation. After all, Social Security came from the depths of the Great Depression. It did. But it was pay-as-you go–there was no big upfront cost as there is in health care.
This denial–or numbness–in the face of a harsh reality reminds me of the times I have called the airlines in the face of a blizzard looking to get them to rebook my flight without penalty. The usual answer is, "The computer says its on time so far." Of course you know it isn’t going to take off in the midst of the terrible storm outside.
Health care reform isn’t going to take off in the midst of this huge financial storm either and McCain, Obama, all those offices on the Hill saying it will aren’t going to make it so.
The sooner we get real–on health care and everything else–the sooner we can start talking about what is really possible.