The next US president is going to be handcuffed

This year’s US presidential campaign has been notable for many things: its interminable length, its lack of substance and its sheer nastiness, to name just three.

What has been notably absent is a serious discussion of the challenges facing the country – those that predate the credit crisis and will be with us long after it abates – and the candidates’ ideas for addressing them. The moderators of the three presidential debates clearly didn’t think the US’s entitlement programmes, such as social security and Medicare, which have the potential to bankrupt the country in this century, were worthy of discussion.The candidates touted green fuels until they were blue in the face.They talked about better, more affordable healthcare that achieves cost savings and belongs to the fuzzy-math school of budgeting.And they enumerated plans for lots of job-creating new spending, while glossing over the issue of how to pay for it.In short, the US presidential campaign has been short on substance and long on slogans.Democratic candidate Barack Obama and Republican rival John McCain have made noises about fiscal responsibility that don’t pass the most basic smell test.Obama has pledged to go through the federal budget “line by line, page by page”, cutting programmes that don’t work and making necessary ones work better.McCain has promised to balance the budget by the end of his first term.Both candidates are looking under the wrong rocks.Excluding defence, discretionary spending (which go through an annual appropriation process) amounted to 17,5 per cent of all federal spending in fiscal 2008, according to the congressional budget office.Even if Obama used a charcoal pencil, it would be hard to find enough savings in non-defence discretionary spending to change the long-term outlook.As for McCain’s goals, “congress stuffed 11 610 projects into the 12 appropriations bills worth $17.2 billion [R191 billion at Friday’s exchange rate]” in 2008, according to Citizens Against Government Waste, a Washington non-profit organisation committed to eliminating inefficiency in federal government.That is a 337 per cent increase from fiscal 2007 – and about 0.6 per cent of the 2008 budget.The ticking time bomb for the federal government is entitlement spending: Medicare and social security.Social security’s costs will exceed tax income in 2017, according to the 2008 annual report from the Trustees of the social security and Medicare trust funds.By 2041, the “trust funds” – there are no assets compounding in the trust funds – will be exhausted and unable to pay full benefits.Neither candidate has offered much of a vision for addressing the credit crunch sinking an economy that was already taking on water.McCain wants the government to buy $300 billion of mortgages to help homeowners facing foreclosure, which sounds like an incentive for homeowners who are current on their mortgage payments to find a way to qualify for relief.Obama wants to give a tax cut to some people who don’t pay any taxes, which sounds like government spending by any other name.Whether they know it or not, the next president of the US will be handcuffed by events and constrained by deficits.He’ll be playing defence.The only bright spot is the prospect of escape in four years if things get worse before they get better.- Caroline Baum, the author of ‘Just What I Said’, is a Bloomberg columnist.The opinions expressed are her ownThe moderators of the three presidential debates clearly didn’t think the US’s entitlement programmes, such as social security and Medicare, which have the potential to bankrupt the country in this century, were worthy of discussion.The candidates touted green fuels until they were blue in the face.They talked about better, more affordable healthcare that achieves cost savings and belongs to the fuzzy-math school of budgeting.And they enumerated plans for lots of job-creating new spending, while glossing over the issue of how to pay for it.In short, the US presidential campaign has been short on substance and long on slogans.Democratic candidate Barack Obama and Republican rival John McCain have made noises about fiscal responsibility that don’t pass the most basic smell test.Obama has pledged to go through the federal budget “line by line, page by page”, cutting programmes that don’t work and making necessary ones work better.McCain has promised to balance the budget by the end of his first term.Both candidates are looking under the wrong rocks.Excluding defence, discretionary spending (which go through an annual appropriation process) amounted to 17,5 per cent of all federal spending in fiscal 2008, according to the congressional budget office.Even if Obama used a charcoal pencil, it would be hard to find enough savings in non-defence discretionary spending to change the long-term outlook.As for McCain’s goals, “congress stuffed 11 610 projects into the 12 appropriations bills worth $17.2 billion [R191 billion at Friday’s exchange rate]” in 2008, according to Citizens Against Government Waste, a Washington non-profit organisation committed to eliminating inefficiency in federal government.That is a 337 per cent increase from fiscal 2007 – and about 0.6 per cent of the 2008 budget.The ticking time bomb for the federal government is entitlement spending: Medicare and social security.Social security’s costs will exceed tax income in 2017, according to the 2008 annual report from the Trustees of the social security and Medicare trust funds.By 2041, the “trust funds” – there are no assets compounding in the trust funds – will be exhausted and unable to pay full benefits.Neither candidate has offered much of a vision for addressing the credit crunch sinking an economy that was already taking on water.McCain wants the government to buy $300 billion of mortgages to help homeowners facing foreclosure, which sounds like an incentive for homeowners who are current on their mortgage payments to find a way to qualify for relief.Obama wants to give a tax cut to some people who don’t pay any taxes, which sounds like government spending by any other name.Whether they know it or not, the next president of the US will be handcuffed by events and constrained by deficits.He’ll be playing defence.The only bright spot is the prospect of escape in four years if things get worse before they get better.- Caroline Baum, the author of ‘Just What I Said’, is a Bloomberg columnist.The opinions expressed are her own