Back-to-School Letter to the US Congress

By Mohamed A. El-Erian
Project Syndicate
3 September 2012

NEWPORT BEACH – What if members of the United States Congress, now returning from their summer recess, were to receive a “back to school” letter from concerned citizens? Here is what a first draft might look like.

Dear Member of Congress:

Welcome back to the Capitol. We hope that you had a good summer break, and that you return to Washington not just rested, but also energized to take on our country’s mounting economic challenges.

The news has been mixed during your absence. We have seen some improvement in economic data, but not enough to suggest that we are any closer to overcoming decisively this painful period of low growth and high unemployment. And, with a self-inflicted fiscal cliff looming – one that could send our country back into recession, pulling the rest of the world with us – businesses are reluctant to hire and invest in new capital goods. Fortunately, the Federal Reserve has signaled its intention to remain active, but its policy tools are poorly suited to the challenges that we face.

Meanwhile, global difficulties remain substantial. We continue to face strong headwinds originating from the deepening European debt crisis, as well as geopolitical tensions in the Middle East. China, once the world’s unstoppable growth engine, is slowing. And, despite all the happy talk, multilateral policy coordination is essentially non-existent.
…
We need you to overcome a prolonged period of congressional paralysis and polarization in order to address the country’s malaise. We need you to pivot in your responses from the tactical to the strategic, from the cyclical to the secular, from the partial to the comprehensive, and from sequential to simultaneous reforms.

If this call to national duty is not enough, we would remind you of your own self-interest. According to the latest NBC News/Wall Street Journal poll, your support among us, the electorate, stands at just 12%. [Emphasis added]

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