The president of the Federal Reserve Bank of Dallas wants us to take a lesson from our neighbors to the south.
In a speech given in Mexico City, Richard Fisher said Mexico is emerging from the recession faster than the United States — and doing a better job of it.
“Mexico is macroeconomically sound and is moving in the right direction to address the vexing microeconomic problems that still hold your country back. In the United States, the opposite is the case,” he said. “From a macroeconomic standpoint, Mexico’s future is bright; its prospects keep improving. Sadly, one cannot say the same about the present macroeconomic trajectory of El Norte."
Fisher, who spent time in Mexico City as a child and speaks fluent Spanish, noted that the Mexican government has been able to enact measures such as a balanced budget requirement, and its government functions well enough to pass a reasonable budget every year. On the other hand, the United States Congress might spontaneously combust with rage if a balanced budget amendment ever made it to the floor, and hasn’t agreed on a budget for three years running.
Can I get an “oops,” America?
Mexico also ran a budget deficit of 2.5% in 2011, compared with 8.7% in the U.S. Mexico’s debt is also much smaller, sitting at 27% of their GDP while our debt-to-GDP ratio was 99% last year and will probably hit 106% in 2012. Yikes.
These are only a splattering of the long list of facts Fisher recited in his speech, and they certainly merit a reconsideration of the stereotypes the American government places on Mexico. Looking south, most only see a place that causes problems instead of a place that could hold the key to fixing our biggest one.
Illegal immigration and drug trafficking are huge problems to be sure, but our budget and economic future make both of those problems seem trivial. Instead of looking to Mexico as an example, we tarnish the country in debates over social issues that generally go nowhere.
But I think there are deeper problems present.
If a poor country that is mired in violence can find time to bridge party-based disagreements and find the financial sanity to drive the country out of a recession, why can the United States — which by all accounts is the most fortunate and safest place in the world — not do the same?
Fisher, I'm sure, agrees.