osewalrus (osewalrus) wrote,
osewalrus
osewalrus

Link Harvest: A Much Better Critique of the Budget Deficit Proposals

Paul Krugman provides a much better, and far more devastating,critique of the recent proposals from the co-chairs of the deficit reduction committee than the "Cat Food Commission" approach. As Krugman notes, the recommendations all flow toward smaller government as the only possible solution. Indeed, it is particularly pernicious to place a cap on federal revenue as the other end of deficit reduction. Why? In the past, we have used both increases in revenue and spending reduction. It is also the case that, once the deficit is reduced to whatever the target, it is easy enough to lower taxes, fees, and other sources of federal revenue if we so desire. Besides, if nothing else, expanding federal revenue is a good hedge against the likelihood that some of the cost savings projected are illusory.

Surveys show that even on the very broad question of "should government do more" v. "should government do less," the public is fairly evenly divided. The question itself is vague and misleading (as indicated when one digs in to details with respondents and find that answers are inconsistent), but the fact that at even the highest level of abstraction there is no consensus for a uniformly "small government" approach indicates that any serious debate over the deficit needs to put all options on the table and examine them with equal seriousness. This includes increasing taxes and fees -- especially on those most able to afford them -- not just cutting spending.

And I'm still waiting for the analysis of how to cut agricultural and corporate subsidies. I'm also waiting for my analysis of how certain other non-fiscal policy changes (e.g., patent reform, allowing Medicaid/Medicare to negotiate directly for bulk discount rates like any other insurer) could reduce the deficit without costing us a dime.

But the whole "Cat Food Commission" thing, still bad tactics. Will not work either long-term or short term. At best, it makes social security untouchable and will encourage "offsetting reductions" in other programs that are not as politically powerful.
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