By Martin G. Knott Jr.
As a small business owner and President of the Maryland Economic Development Corporation (MEDCO), I am aware of the important role played by “Main Street” in the country’s economy. They create jobs and provide valuable services for millions of people across the country, and some might argue they are the backbone of America.
So you can imagine my concern over the national debt and the numerous threats it poses to small businesses, such as their ability to grow and plan for the future. If we want our country’s small businesses to remain strong and able to meet future challenges we must act now on meaningful debt reduction – the health of our economy depends on it.
On Tuesday, when the attention of the country is focused on President Obama’s State of the Union address, we are sure to hear policy proposals for a number of our nation’s pressing issues. But what I will be listening for is for the president to discuss our “State of the Debt,” and push for a deal that addresses the main drivers of this $11 trillion (and counting) calamity. He must demonstrate a willingness to work with the both Houses of Congress and both parties to forge a deal that tackles this problem in a comprehensive manner.
In the coming months, Washington will face a series of self-manufactured crises – the delayed “sequestration” spending cuts, the expiration of the laws that keep the government going on a day-by-day basis, and the debt ceiling. Those spending cuts alone – the suspended part of the New Year’s Day deal to avert the so-called “fiscal cliff” – could cost Maryland up to 115,000 jobs if they go into effect as scheduled in March.
Though we saw a glimpse of bipartisanship in the late-night deal to avert the “fiscal cliff,” – and another such glimpse in the agreement to increase the debt ceiling – these deals only serve as temporary fixes to our nation’s economic woes. But continually delaying the tough decisions will not solve the systemic problems that plague the country. Each time Congress kicks the can down the road, it just adds to our mountain of debt and increases the stakes for future agreements.
Alarmingly, our unsustainable long-term fiscal trajectory, if left unchanged, will be even more detrimental to the business climate than our short-term problems. Relative to the size of our economy, the national debt is larger than any point since immediately following World War II, and it’s continuing to grow. It’s so large that interest on the debt – nearly a quarter-trillion dollars a year – is larger than the federal budget for education, housing, Head Start and food stamps combined.
If nothing is changed to slow the growth in spending and to raise more money to pay for our obligations, we’re looking at annual interest payments that crowd out funding for programs that benefit the middle class. Eventually, our debt will cause interest rates, inflation rates and even unemployment rates to rise. It will get more expensive for businesses like ours to borrow money to make new investments or hire. And customers will begin to dwindle.
We need a calculated plan that addresses the real drivers of the debt. Such a plan will have to rein in spending for unnecessary or low-priority programs. It must slow the growth of our entitlement programs by finding a way to control health care costs for our aging population. And it needs to structurally reform our outdated, loophole-riddled tax code in order to raise additional revenue and promote economic growth in every sector of our economy.
Small business owners across this country make tough decisions every day to ensure the long term financial health of our business. It’s time for us to reach out to our elected officials and ask them to put aside politics, do the simple math and make the tough decisions we have to make every day.
Which leads me to a simple but important request: please join me and more than 345,000 concerned citizens who have already pledged their support with the Campaign to Fix the Debt. This nonpartisan campaign has brought together business leaders, policy experts and former Members of Congress in an effort to urge our leaders to set aside partisan bickering and to craft a bipartisan solution to putting our debt on a sustainable course. Please visit FixTheDebt.org to sign the Campaign’s Citizen’s Petition and learn more about this movement.
I urge President Obama and our leaders in Congress to come together and take substantive action towards debt reduction so that America is in a better position to meet tomorrow’s challenges.
Martin G. Knott Jr. is owner of Knott Mechanical located in Sparks. He is Chairman of the Maryland Economic Development Corporation (MEDCO) and Chair elect of the Governor’s Workforce Investment Board. He is a co-founder of Center Maryland.