No politician is likely to get elected or re-elected to the presidency by saying that it could take a very long time for the economy to produce the kind of robust growth that would create jobs fast enough to significantly lower the unemployment rate.
Yet, that appears to be precisely what faces the U.S. Consumers and governments are so saddled by debt, so tapped out on average, that the kind of spending necessary to boost the economy to significantly higher growth levels is impossible.
Tom Lauricella of The Wall Street Journal on Monday described the problem. An excerpt:
Around the globe, the inability of governments and households to reduce their debt continues to cast a shadow over Western economies and the financial health of individuals. Today, U.S. consumers have more mortgage and credit-card debt than they did five years ago, and the U.S. budget deficit is worsening. At the same time, European governments are having to throw billions more euros at Greece to keep it afloat.
The repercussions are likely to play out for years to come in the form of patchy economic growth, further government market intervention—such as last week's decision by oil-consuming nations to release more oil onto the markets—and frequent financial-market swings.
The fundamental problem is that reversing the trend of piling on the debt requires some combination of cutting spending, growing income or the economy, and inflation. But wage growth is stagnant and home prices, which underpin much of the debt problem, are still falling.
Meanwhile, in a vicious circle, businesses aren't hiring or investing because they know consumers are tapped out. Banks, for their part, are hoarding cash, being stingy with new loans.
Small wonder, then, that presidential candidates don't want to spend a lot of time unpacking these problems during their campaign appearances. These are complicated, Gordian knot issues.
Drastic cuts in consumer and government spending would reduce the immediate need to take on more debt.
But such cuts could also further reduce overall demand which would put further downward pressure on the economy.
That would create less revenue and income and, ironically, the need to take on more debt.
Reducing taxes would leave added income in consumers' hands, perhaps to pay more of their debts. But it would mean less revenue to the government. In order to keep debt levels from rising proportionately, policymakers would need to cut government spending which, again, could slow the economy.
There are no easy or certain answers. And these are problems that certainly can't be solved with a solution that fits in a soundbite.
Yet, voters really aren't hearing any of the presidential candidates digging into these problems and offering solutions that seem to measure up to the size of the difficulties.
It's still early so there's plenty of time for detailed discussions. One thing is certain — these debt mountains of both government and consumer obligations aren't going away any time soon.