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Monday, July 30, 2012

'The One-Sided Deficit Debate'

James Kwak is pessimistic about the deficit debate:

The One-Sided Deficit Debate, by James Kwak: Michael Hiltzik ... wrote a column lamenting the domination of the government deficit debate by the wealthy. He clearly has a point. The fact that Simpson-Bowles—which uses its mandate of deficit reduction to call for . . . lower tax rates?—has become widely perceived as a centrist starting-point for discussion is clear evidence of how far to the right the inside-the-Beltway discourse has shifted, both over time and relative to the preferences of the population as a whole.
What’s more, the “consensus” of the self-styled “centrists” is what now makes the Bush tax cuts of 2001 and 2003 seem positively reasonable. With Simpson-Bowles and Domenici-Rivlin both calling for tax rates below those established in 2001, George W. Bush now looks like a moderate; even many Democrats now endorse the Bush tax cuts for families making up to $250,000 per year, which is still a lot of money (for most people, at least).
But some of the blame for this state of affairs must rest with Democrats, liberals, and their usual mouthpieces as well. For over a year now, the refrain of the left-leaning intellectual class has been that the only thing that matters is increasing growth and reducing unemployment, and any discussion of deficits and the national debt plays into the hands of the Republicans. It may be true that jobs should be the top priority right now, but the fact remains that many Americans think that deficits matter (and most of those left-leaning intellectuals would concede that they matter in the long term). Those Americans are currently getting a menu of proposals with Simpson-Bowles in the right, Paul Ryan and Mitt Romney on the far right, and Fox News on the extreme right. There is no explanation of how to deal with our long-term debt problem in a way that preserves government services and social insurance programs and protects the poor and the middle class.
One of my objectives with White House Burning was to help fill that gap, beginning with an explanation of what the federal government does and why it matters and continuing with a proposal for how to fill the long-term budget gap without gutting Social Security, Medicare, and Medicaid. But Simon and I don’t carry a lot of weight with the Serious People who like talking about deficits and shared sacrifice and belt-tightening (not as much as American hero Jamie Dimon, apparently). As long as those people have the floor to themselves, nothing is going to change.

    Posted by on Monday, July 30, 2012 at 09:50 AM in Budget Deficit, Economics, Politics | Permalink  Comments (26)


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