The Age of Austerity is upon us (even if polticians won't admit it)

"A politician is worth nothing if he cannot invent some interesting and unimportant issues to divert the eyes of the populace from the problems actually involved."

That quote is from the philosopher Will Durant in his essay, "Is Democracy a Failure?" It gets to the heart of the difficulties facing our politicians in the early 21st Century.

An ever-increasing percentage of the people politicians represent and govern are aware of the "problems actually involved." Their living standards are deteriorating. Their hopes for their future and that of their children are diminished. It's therefore harder to distract them through pie-in-the-sky promises or to make them believe the notion that laws are made by themselves rather than their rulers.

We spend a lot of time musing about the tea party movement and what that means. The Republicans are hoping they can feed on the loathing of what these people see as the predatory nature of Big Government and sweep back into control of Congress. The Democrats are fighting back but seem resigned to staggering losses on November 2nd.

It's unlikely, however, that this election will have much effect in changing the big picture one way or another. As Washington Post columnist Robert J. Samuelson wrote this week, "We have entered the Age of Austerity. It's already arrived in Europe and is destined for the United States."

As we discussed with Mr. Samuelson on the show, whoever's in charge is going to have to cut social spending and raise taxes on a widespread, indeed massive basis. All promises to the contrary are meaningless. After decades of profligate spending and borrowing, the party's over.

Huge deficits and debts have already caused a belt-tightening in Europe. Greece and Portugal have raised their value added taxes, the French are again in the streets protesting threatened increases in retirement age and engaging in rolling labor strikes, a charming national pastime there. The Eiffel Tower was shut down this week by a work stoppage.

As an aside, it makes me recall that a few years ago my wife and I were in bed in a Paris hotel watching CNN International, when a scroll at the bottom of the screen announced a wildcat strike of Air France workers. We were to leave the next day on Air France. I remarked, "I suppose it's too late to leave early," and it was, though we managed to get back home without too much delay.

So far, the United States has been spared the bond market upheaval causing governments in Europe to react to sharply higher borrowing costs. Our interest rates remain near zero. But the piper is knocking on the door, and the wizards in charge in Washington are conflicted as to what they should do when they answer it.

Current and former Federal Reserve officials are divided on what actions would be appropriate. Some favor setting interest rates higher to jog the economy into some actual job growth. They think inflation can be managed. They want renewed intervention, which means creating more money to buy long term Treasury debt.

As these academics ponder the real world, they seem staggeringly unaware that the small business hiring surge they desperately wish to happen won't. Not in this environment. Jobs are created when business owners spot opportunities to grow their businesses. Such opportunities are scant these days.

And with an unavoidable increased tax burden and a cutback in government spending that is inevitable, things are likely to get a lot worse before they get better.

People sense this, as reflected in polling done for the political newspaper The Hill. It shows that a majority of American voters think a viable third party would be a good idea: 54 percent favor it, and among independents 67 percent are in favor. Even 49 percent of Democrats and 46 percent of Republicans would like another choice.

Whether the tea party can fill the bill is another question. History would suggest not. Third parties in American politics have been spurred to life by charismatic leaders such as Teddy Roosevelt and Ross Perot. They make a brief impact but don't endure.

What this Age of Austerity will spawn politically remains to be seen. There are no more easy answers, and most of the people are not in the mood to be hoodwinked by the professional politicians or their hired "experts," who seem as bewildered as the rest of us at what's unfolding and what to do about it.

Ron Smith can be heard weekdays, 9 a.m. to noon, on 1090 WBAL-AM and WBAL.com. His column appears Fridays in The Baltimore Sun. His e-mail is rsmith@wbal.com.

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