You may be wondering what the CEO of a company specializing in the financing and marketing of fuel around the world has in common with the leader of the Florida Hispanic Chamber of Commerce. It’s true that our backgrounds may differ quite a bit, but there are more similarities than one might suspect, such as running effective and principled operations — virtues that are universal to all lines of business.
Most notably, it is in both of our interests to see the country’s economy operating in a productive manner. And we share the concern that our national debt is inhibiting the economy from reaching its full potential. It should be in the interest of all Floridians to see that we successfully confront our debt burden so the economy can flourish for generations to come.
Relative to the economy, the national debt is currently at its highest point in the last 75 years. And while many folks feel like our near $17 trillion debt burden is an abstract number, incapable of affecting them on a daily basis, the fact is that you are a lot more vulnerable to this economic threat than you might think. For instance, higher debt levels can increase Treasury bond interest rates, causing an interest rate spike for home mortgages, car loans and loans for small businesses.
This can be devastating for anyone looking to make major life purchases, and especially for someone seeking to start or grow a business. Excessive debt can also result in slower economic growth, less budgetary flexibility and a greater risk of an eventual fiscal crisis.
Considering these potential repercussions, it is both surprising and alarming that lawmakers have not yet adequately addressed this problem. Instead of taking the necessary steps to responsibly confront our unsustainable debt burden, our elected leaders seem more interested in shying away from the tough decisions that must be made in order to better our economic position.
Sequestration alone will end up costing Floridians roughly 80,000 jobs. In place of these mindless cuts that do nothing to improve the country’s long-term economic outlook, we need to concentrate on achieving savings in a smart, practical manner that won’t harm the areas of the budget where we should be investing.
If we are to truly tackle our ballooning national debt, we can no longer afford to tiptoe around the necessary reforms to our tax code and entitlement programs — the two parts of the budget contributing most to annual deficits over the long run.
Structural entitlement reform must be part of any viable debt deal. The Social Security system is on the road to insolvency by 2033 and Medicare is not far behind. It is critical that we make adjustments to the way these programs are administered or they simply will not be there for future generations. The rise of healthcare costs — the recent dip in these costs is merely a blip — and an aging population make these changes all the more essential.
As for our tax code, we can tell you from experience the yearly nightmare businesses experience when trying to comb through its tangled mess of laws and regulations. Its overly complex and convoluted nature makes compliance extremely difficult, and its loopholes and deductions favor the wealthiest among us. We applaud the recent efforts of Sen. Max Baucus and Rep. Dave Camp to make the code simpler and fairer for all Americans — an approach that, if successful, is sure grow the economy and make us more globally competitive.
To date, President Obama and members of Congress haven’t exactly seen eye to eye on the best way to confront our debt. However, this fall they will be presented with opportunities to forge a compromise. We need to let them know that now is the time to come together and enact reforms that will stabilize and reduce the national debt as a share of the economy.
In order to show our support for their efforts we are members of the Campaign to Fix the Debt, a non-partisan, nationwide network of business and policy leaders, as well as citizen-activists, who want to see Washington responsibly address our national debt. The campaign believes that with its support, lawmakers will be able to meet in the middle and reach an agreement that comprehensively tackles our national debt and gets the economy back in good standing.
While the nation may have its differences, we should all be in agreement that tackling the national debt should be a priority. Let’s do what’s right — let’s fix the debt.
Paul Stebbins is the executive chairman of World Fuel Services Corporation. Julio Fuentes is president of Florida State Hispanic Chamber of Commerce. Both are Steering Committee members of the Florida Chapter of the Campaign to Fix the Debt.