That is: Whether the U.S. should spend money now to remedy the financial hole we're in or pay later.
And by "spend money now," I mean risk dishing out more unprecedented government funding that is prone to waste, corruption and mismanagement.
And by "pay," I mean risk watching idly as unemployment skyrockets passed even what it is now (10.2%, highest in 26 years), health care costs go berserk, the dollar weakens, and failing banks and businesses crumble.
Each option undoubtedly comes with a healthy dose of risk. Deciding which option to choose is a matter of risk management.
Let's break that question down to the personal level: If you owned a business that could no longer sustain itself or the debt you were in, would you cut costs and hold tight for the plunge or would you spend money aggressively to get your business back on track?
Now let's add some known circumstances. If the situation was dire (say, only the worst financial crisis since the Great Depression), that would probably raise the stakes—meaning, the chances of your business riding it out could be slim to none. And just like the word circumstance implies, there is nothing in your control to change that. Hence, the alternative is to reform your business to better "weather the storm" through bold yet concentrated spending.
Notorious advertising agent Morris Hite once said:
There is more money wasted in advertising by underspending than by overspending. Years ago someone said that underspending in advertising is like buying a ticket halfway to Europe. You've spent your money but you never get there."
It turns out that skimping on costs in marketing a brand doesn't effectively win you the best return on an investment. Likewise, plans to save your business must be plentiful in dollars and bold.
This road scares a lot of people; and admittedly, it is a scary road to take. Our national debt has been growing since George W. Bush took office, and more unprecedented spending certainly doesn't make it easier for the next generations of America. But avoiding action now and holding tight may lead to bigger consequences later, and this is really the best defense for spending early as a means to curb the financial crisis' immediate effect.
The problem is that future risks, even dangerous ones, are hard to concretely put together (think Global Warming). There are too many unknowns that would otherwise simplify the decision-making process.
What we do know about our current health care system is this: Despite rising costs in the past and projections to jump by 4% in the next 10 years (increasing our total spending from 16.2% to 20.5% of GDP), America is ranked a mere 34th in life expectancy rates around the globe at 78 years.
And so it's now up to the Senate to decide which threat is more dangerous and should receive the most priority. Our growing debt which could hinder our growth later? Or is it our hindering growth that could lead to even more debt later?
The New York Times has a timeline detailing the History of Health Care Reform, which emphasizes the importance on the House's recent bill passage.
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