Of course, all of this assumes a rational electorate and leaders who can look beyond tomorrow's headlines.
On that count, I'm concerned. Consider, for example, the user tax for maintaining the U.S.'s system of interstate highways, bridges and tunnels: It hasn't been raised since 1993. The tax of 18.4 cents a gallon now -- thanks to inflation -- is only worth 10.9 cents. To not have at least raised the tax to keep up with inflation is an unfathomable failure of the body politic. If you break an axle on America's potholed roads, my suggestion is to submit the bill to Grover Norquist, head of Americans for Tax Reform. By insisting that politicians (almost all of them Republican) pledge to never raise any tax, he has single-handedly helped make the roadways of the U.S. comparable to those in developing countries (see this, this, this, this, this, this and this).
The U.S. government's debt now has an average weighted maturity of about 5.8 years. The country spends almost a quarter-trillion dollars a year to service that debt. With the Fed poised to raise rates, it will soon become much more expensive to carry that load.
The obvious solution beckons.
There's an old Wall Street proverb that says, “When the ducks are quacking, you have to feed them.” And when it comes to issuing ultra-long bonds, the time is now.
This column was provided by Bloomberg News.