Many think we should stop spending, but no one really seems to know what we should stop spending on...there's a lot of talk about this BIG idea, but there are few, if any concrete steps for what should be done. Enter Bowles and Simpson, two guys I admittedly knew nothing about before this process. I admittedly know almost nothing about them now. But they've got this idea for cutting the deficit. It involves raising some taxes, cutting others, slashing spending by reforming Social Security, spending less on the military, etc, etc, etc.
The report is immediately rejected by both sides. Democrats are against cuts to the welfare state, Republicans abhor raising taxes. The American government continues to work against the American people who have now been denied an economic recovery because of Republican obstructionism and are currently being denied a balanced budget. What to do, what to do, what to do.
The truth is, this is a sticky ideological argument. Democrats oppose cuts to Social Security and other aspects of the welfare state. These cuts have to happen. The retirement age needs to be raised, at least for part of the population, benefits for public service unions must absolutely be curbed. Republicans think the best way to cut a deficit is to deny the government 4 trillion dollars worth of income. I don't even need to explain the flaw in that thinking. In fact just today, one James Pinkerton of Faux News wrote an opinion piece on why tax cuts will spur economic growth. Pinkerton may have a point, but he wants us to do math without numbers. It's hard to come up with a plan for reducing a large number that doesn't factor in other numbers. Furthermore, Pinkerton's plan that calls for dynamic growth - like many Republican plans - ignores the fact that there are 300 million people in America, dynamic growth isn't going to happen unless we get all of them involved. Problematically, Democratic plans to do just that have been expensive and relatively ineffective.
So what do we do about this deficit. Without having read the Bowles-Simpson plan in its entirety, I'd say there are some solid first steps. A combination of tax cuts and tax hikes are necessary. Again, I mention a gas tax. The government would make a boatload of money and simultaneously encourage innovation and development in a field that is begging for both. On the flip side, taxes for corporations and businesses should fall. People do need to be encouraged to spend and invest. Is this really such a stretch for liberals and conservatives to agree on...really?
And while Democrats are being unrealistic about reforming Social Security, Republicans are just as unrealistic about defense spending. How about this, we raise the retirement age a year or two for all people making more than $X, and at the same time, we cut back on the number of nuclear missiles we maintain. Hell, we're not shooting them at anyone. Why hoard food if you're not going to eat it? Could we compromise here? Could we scale back spending on traditional military gear and encourage innovation by investing in new technologies? Technologies that - like the space race - might have positive spinoffs for all Americans? There you go James Pinkerton. That's dynamic.
And what about taxes? Is it really good to make permanent temporary tax cuts that will cost us 4 trillion dollars? Is that really a good idea? Could we not compromise and agree to extend them for a few years in order to help the economy recover with the goal of letting them lapse then to raise revenue? Is that totally unacceptable? Why do things that seem so easy and simple turn out to be politically impossible? Are we THAT shortsighted?
So as we keep the Simpson-Bowles report in mind, we need to remember a few important things. The Pinkerton hypocrisy - that we can encourage dynamic growth while investing in only a portion of the population - is unrealistic. Similarly, the Democratic idea that we can't cut into a safety net that has plenty of holes anyhow is unsustainable. So we're left with an unrealistic extreme vs. an unsustainable extreme. And yet we can find no middle ground. One side refuses to acknowledge that you can't cut a deficit without slowing spending, and the other side refuses to acknowledge that you can't cut a deficit without increasing revenue.
And so here we are, with a deficit commission report that asks both sides to take a step towards the center, and what do they do? Run from each other. America needs our leaders to put their best foot (and their brains) forward. Now would be the time to do that. If they do, we'll make progress. If not we'll be paying public service unions with tax revenue we're not collecting.
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