I have a feeling this session is going to be a bit irritating:
Debt and the Deficit: What's Really on the Table?
Monday, April 29, 2013 2:15 PM - 3:15 PM
- Bob Corker, U.S. Senator
- David Cote, Chairman and CEO, Honeywell; Steering Committee Member, Campaign to Fix the Debt
- Maya MacGuineas, Head, Campaign to Fix the Debt; President, Committee for a Responsible Federal Budget
- Peter Orszag, Vice Chairman, Corporate and Investment Banking, Citigroup; former Director, Office of Management and Budget
Moderator: Steven Rattner, Chairman, Willett Advisors; former Counselor and Lead Auto Advisor to the U.S. Secretary of the Treasury
With outsize debt putting the stability of credit markets and the pace of economic growth at risk, will Americans embrace shared sacrifice to set the country on a path toward fiscal health? Or is the problem essentially the result of gridlock in Washington? And what does "shared sacrifice" actually mean? Who will bear the heavier burden: the rich, the elderly, the middle class? Are Simpson and Bowles still relevant? Our panel will examine the economics and politics around our accumulating public debt and annual deficit, with an eye toward palatable and realistic solutions. Can we grow our way out of the mess? How will we cope with the twin hazards of graying demographics and healthcare inflation? Back to the credit markets: Are Treasuries as safe as they seem?
There was remarkably little discussion of increasing revenues through tax rate increases. There was some discussion of increasing revenue, but it was mainly about eliminating deductions like home interest rather than increasing tax rates. Instead, most of the focus was on, surprise, "entitlement reform" with only Orszag being careful to point to health care costs as the main problem to solve.
The most entertaining moment was when the business guy on the panel, David Cote, said that unlike in business where what you think, say, and do must align, for Congress these are different decisions. Senator Corker said he was offended by that comment and went on to defend Congress (e.g. saying many people in business don't understand that politicians have to represent a diverse constituency). Ha. A Republican fighting with a business rep, then defending government. Too bad he wants to cut the crap out of it.
Other than that, the degree of hawkery and the implicit assumption that the only way to solve problems with our long-run budget picture is to cut social insurance programs the working class relies upon was, in fact, irritating. The continued discussion about deficit reduction as the key to spurring private sector growth was similarly irritating. It's exactly what we heard about the Bush tax cuts, and we know how that turned out. A huge increase in the debt load with little (if any) increased growth to show for it.
Finally, as far as I recall, the word "unemployment" did not come up. In the short-run, deficit hawkery is what's standing in the way of doing more to help with the unemployment problem. The key question -- whether the concern in the short-run with the debt rather than the unemployed is justified in the short-run (it isn't in my view) -- was not even discussed.