NEW YORK ( TheStreet Ratings) - America's debt crisis does not have to turn into a Shakespearean tragedy. The full faith and credit of the United States can be preserved by removing the politics from the decision to raise taxes.
Just as the Federal Reserve Board remains independent and sheltered from the harsh political winds by not needing Congressional or Presidential ratification of their monetary policy adjustments to money supply and interest rates, American would be well served by having an independent body setting fiscal policy on tax revenue collections.
One hundred years ago, the United States Congress, after seeing the damage caused to businesses by the panic of 1907, as well as the many other panics and crashes experienced in the 1800's, passed the Federal Reserve Act of 1913. They believed that an independent board authorized to set interest rates and control the supply of money would aid in business growth.
We need another independent body of government to set fiscal policy consistent with the U.S. Constitutional goal of preserving our union and supporting the general welfare by paying down and eventually eliminating our national debt. I, hereby name this body the Fiscal Authority Board, or FAB, because it is such a fabulous idea.Why is FAB needed? There is little hope that the current structure of our federal government can balance a budget let alone pay off the U.S debt. An independent body with no social agenda setting fiscal policy may be required to balance our books. Politicians, cowered by the thought of voter backlash, never want to raise taxes. They rationally fear that fulfilling their required duty to do what is in the best interest of the continued prosperity of our country will cost them their job in the next election. President Obama made a campaign promise to cut the deficit. He would like both spending cuts and increases in tax revenue consistent with his other promises to protect Americans making less than $250 thousand a year and to collect more from tax sheltered, affluent Americans and corporations not paying their fair share. The President's grand compromise to raise the debt ceiling is reviled by both ends of the political spectrum. Plus, Mr. Obama had an opportunity to let the Bush tax cuts expire but made the political decision to continue the tax breaks.