By: Dr. Lynn Reaser
Some good news is finally coming out of Washington. The U.S. has completed its final sale of GM stock. The “Volcker Rule,” outlawing certain trading activities by banks for their own accounts has been implemented. A budget deal has been reached by key Republicans and Democrats on Capitol Hill.
Should we celebrate? Have we now moved beyond the crisis stage on multiple fronts? Unfortunately, the answer is “no.” While some progress has been made, much more is needed. The U.S. has no clear policies as to which firms or industries might be bailed out in the future. Although some risky behavior by banks will now be prohibited, other actions could trigger a future financial crisis. The greatest shortcoming involves the federal budget. While a government shutdown and across-the-board sequestration cuts have been avoided, addressing the long-term rise of the nation’s debt has again been delayed. Ignoring entitlement programs, such as social security and medicare, while failing to reform the tax system, means that we are not on a sustainable path.