Americans To Congress: Cut The Deficit, But Not Our Entitlements
Once again, we have proof that when it comes to fiscal matters the American people are rather schizophrenic:
Americans want Congress to bring down a federal budget deficit that many believe is “dangerously out of control,” only under two conditions: minimize the pain and make the rich pay.
The public wants Congress to keep its hands off entitlements such as Medicare, Medicaid and Social Security, a Bloomberg National Poll shows. They oppose cuts in most other major domestic programs and defense. They want to maintain subsidies for farmers and tax breaks like the mortgage-interest deduction. And they’re against an increase in the gasoline tax.
That aversion to sacrifice is at odds with a spate of recent studies, including one by President Barack Obama’s debt panel, that say reductions in Medicare, Social Security, military and other spending are necessary to curb a deficit that totaled $1.29 trillion in the fiscal year ended Sept. 30, or 9 percent of the gross domestic product.
“The idea that we can solve our structural-deficit problems merely by asking more of the well-off is totally unrealistic,” said David Walker, who was U.S. comptroller general from 1998 to 2008 and now leads a group advocating against deficits. “The math simply doesn’t work.”
According to the Dec. 4-7 poll, taken days after Obama’s commission sounded an alarm over the nation’s “unsustainable fiscal path,” the public still believes it’s more important to “minimize sacrifice” than to take “bold and fast” action to pare the $13.7 trillion national debt.
This is why I don’t think we’re going to really tackle our fiscal and economic problems until we actually reach the crisis point.
This really defines the legacy of Ronald Reagan. He is the one responsible for convincing half of the electorate that the way to balance a budget is to cut taxes. Cut taxes, and government revenues will actually go up, thereby allowing us to pay for all the spending that we want.
In a rational world, the fact that Reagan went on to triple the national debt should have stood as a definitive refutation of this notion. We might have expected a rejection of Reaganism and a return, on the Republican side, to the older, more mainstream fiscal conservatism that also wanted small government, but recognized that you had to pay for whatever size government you have.
But we don’t live in a rational world. Reagan had electoral success, and developed a cult following on the right – and like any cult, hero-worship, and a total unwillingness to critically assess the leader has been a central feature of that.
Oddly enough, the Democrats, for all their sin, have been the responsible ones over the past generation. They tend to favor having government do a lot, and thus a lot of spending, but they generally are willing to pay the price by also standing for sufficient taxation to pay for it.
The American people are never going to accept what we all know is basic common sense (that you need sufficient taxes to pay for the spending you want) until the Republican party dramatically rejects Reaganism and embraces true fiscal responsibility. And that includes an end to fantasy budgets that get rid of SS or Medicare, or nonsense like that. The American people do want those safety net programs, and we simply have to pay for them.
Even Media Matters (http://bit.ly/fr3eOf), no conservative mouth piece, acknowledges that revenues in constant dollars increased during the Reagan years. They quibble that the increase was only 20% and there are many variables at work other than tax rates, but to argue that revenues didn’t go…well, that’s just not true.
Here (http://nyti.ms/fAorKj) even Krugman acknowledges that revenues went up ‘only’ 19%.
Perhaps the deficit isn’t the result of tax cuts or eroding tax receipts…maybe it’s something else. The answer is left as an exercise for the reader.
They quibble that the increase was only 20% and there are many variables at work other than tax rates,
Thats not a “quibble”. That is stating of fact. There are many variables at work. Of course revenues eventually went back up – unless we had a full blown depression, or a very extended recession, that is inevitable.
“but to argue that revenues didn’t go…”
Who argued that?
Revenues did not go up because the tax rate was cut. Revenues went up because the normal business cycle turned, due in large part to the slaying of inflation (accomplished by the Fed, under the direction of Carter-appointee, Paul Voldker).
The Reagan tax rates caused an immediate decrease in revenues and then reset the revenue rate at a point permanently below what was needed to pay for spending. Reagan himself had to spend much of the rest of his administration passing a long list of small tax increases just to keep things from getting completely out of hand. As did his two successors.
I was responding to your ridicule of the Reaganesque position that we can “Cut taxes, and government revenues will actually go up” and pointed out that when he cut rates, revenues indeed went up.
I agree that we need to pay for the expenditures we want. I suspect we disagree on how much those expenditures should be and how best to grow the economy to lift all boats.
As loathsome as politicians can be, they really do represent the people who elect them, that is, if they want to continue to get reelected…so before anyone around here want to whine about how irresponsible people in Washington are, take a good long look in the mirror, or at your relatives, friends, and neighbors…the problem isn’t so much what’s going on in Washington but, rather, what’s going on in the whole country…