Quality of life pegged to deficit
Ezra Klein offers a Wonkbook Rorschach test today on the deficit. “How do you feel,” he poses?
First off, looking at the deficit is looking at the symptom of a problem. The problem is 1) we spent too much and borrowed too much, and 2) we didn’t tax enough to pay for our actions.
So, the solutions are clear: 1) reduce spending and 2) raise taxes.
The next questions are 1) where and 2) how?
To see Congress and the President and the two parties plus independents addressing the problem and coming up with a degree of alignment about the specific solutions gives one hope. But, we have had quite a dose of hope from our President and ambassador of enthusiasm already. Needed is tangible progress.
So, let’s see some action, details, and outcomes. No doubt, damage to our quality of life has already occurred. You don’t make big mistakes without consequences. The remaining questions are who will pay and when, which generation and how?
“Here's a Wonkbook rorschach test: Do today's top two stories make you optimistic about our ability to deal with the deficit, or pessimistic?
The case for optimism: The recommendations of the various deficit commissions aren't perfectly aligned, but they're not that far, either. Defense cuts are on the table, and so is non-security discretionary spending. Higher taxes will be part of the solution, as will cuts in tax expenditures. Entitlement benefits will need to be pulled back -- but in a progressive fashion (maybe even including benefits boosts for low-income beneficiaries), and their revenues will have to increase as part of the deal. Better yet, the combination of a coming vote to lift the debt ceiling and a Republican Party that doesn't want to be seen as abandoning its anti-deficit mandate will move these policies from white papers to statute.
Here's the case for pessimism: The recommendations of the various deficit commissions aren't perfectly aligned, but they're not that far, either. They're a bunch of stuff that neither party would dream of passing. Defense cuts? Tax increases? You think lawmakers are going to go after Social Security and the mortgage-interest deduction at the same time? You've got to be kidding. Congress is about to blow up the deficit to extend the Bush tax cuts. That's where you're seeing their true colors on the debt. And the mixture of Republican newcomers who won't compromise and deficit plans that can't pass mean there's a real chance that the vote on the debt ceiling will lead to some sort of total meltdown, which will in turn freak the bond markets out, which will hurt our economy and overwhelm anything the Fed was hoping to achieve with QE2.
So, Wonkbook readers. Which is it?”