Debt Commission–harsh medicine?
The chairs of the Obama Debt Commission – charged with putting a blueprint together to reduce the deficit and put the government’s finances on sound footing – have released their preliminary recommendations. And their recommendations are, as most who have monitored this situation should know, harsh. Of course they must be – because the government has spent itself into a position where harsh and drastic measures are both necessary and called for.
Expect those that compose much of that government, at least on the left, find such austerity “unacceptable” in the words of Nancy Pelosi (whose PAYGO has been so instrumental in preventing this situation from being worse /sarc). Before we get into the recommendations, let’s get one thing clear:
Those changes and others, none of which would take effect before 2012 to avoid undermining the tepid economic recovery, would erase nearly $4 trillion from projected deficits through 2020, the proposal says, and stabilize the accumulated debt.
That’s $4 trillion from a projected $10+ trillion in projected deficit spending over the next 8 years. So we’re still talking about years of deficit spending. And not one dollar will come off the debt – it will only “stabilize” it.
The point is that if doing what is necessary to cut the deficit spending of the next 10 years by 40% is “unacceptable”, imagine what any solution given to tackle the debt will be. Paul Krugman calls the recommendations “unserious”.
Really? Is there anyone out there who doesn’t understand that there is absolutely nothing “unserious” about the problems we face or the fact that to solve them drastic spending cuts are necessary? Krugman is apparently incensed that the recommendations involve 75% spending cuts and 25% tax increases (the tax increases are essentially the elimination of deductions, the lowering of taxes across the board and the broadening of the tax base).
But how in the world do you stop deficit spending if you don’t drastically cut spending itself?
The commission chairs recommend cuts or changes is all areas – entitlements, defense, non-discretionary spending, discretionary spending. Some thing sure not to please anyone. For instance, they recommend raising the retirement age on Social Security for future retirees, as well as cutting benefit increases. In defense, their goal is 100 billion in cuts. As I’ve said before, defense cuts can be made and should. Just so it is fat and not muscle that goes.
The plan is harsh medicine for the minority that believe that government is the answer to everything. And, as you’ll see (just watch) they will fight these recommendations tooth and nail. Republicans, on the other hand, have reacted cautiously. I’m not sure why. They’ve talked about cuts in spending and simplifying the tax code for years. Here’s a commission talking about both and recommending they be done.
Politics, fingers in the wind, and ideology begin to emerge. What the chairmen have done is taken the discussion from a nebulous “we’d like to see spending cuts” to “put up or shut up” with specific recommendations.
It is going to be instructive to see how both parties and the president react. It is the latter, in particular, I’m interested in watching:
Mr. Obama created the commission last February in the hope it would provide political cover for bold action against deficits in 2011. His stance now, in the wake of his party’s drubbing, will go a long way toward telling whether he tacks to the political center — by embracing such proposals — or shifts to the left and leaves them on a shelf.
Anyone – who votes for “leaves them on the shelf?”
~McQ