April 16, 2011

TO READ THE PHRASE "MAINTAINING U.S. FORCES IN GERMANY AT EXISTING LEVELS"....:

We Are All Deficit Cutters Now (IRWIN M. STELZER, 4/16/11, Weekly Standard)

Let me paint with the broadest brushes. Barack Obama wants to restore the nation’s finances primarily by unspecified cuts in military spending, taxing those he considers to be rich, and practically rationing health care. This would enshrine in the budget three major themes of the Democratic left.

♦ Extend the Libyan model to all U.S. interventions. No use of force unless approved by the United Nations (presumably the blessing of the Arab League will not be needed in all future cases), and then only in conjunction with allies who will be expected to bear the major burden of any engagement. This avoids not only the cost of those interventions, but such expenses as are associated with maintaining U.S. forces in Germany at existing levels.

♦ Reduce the inequality of after-tax incomes by making the tax code more progressive—soaking the rich, in the vernacular. What the president considers to be “loopholes” will be plugged, and the tax rate on families earning more than $250,000 per year will go up, crudely stated by the president as eliminating “tax cuts for every millionaire and billionaire in society.”

♦ Maintain what the president calls “investment” and others call spending on education and infrastructure to better equip the country to compete in an increasingly globalized world, continuing the expansion of the role of the state that has been the hallmark of his presidency.

Over to Paul Ryan, the hero of the deficit cutters in the Tea Party and, I would guess, old-line Republican conservatives who favor a balanced budget at all times, and who believe that the only people more evil than John Maynard Keynes are his present-day followers. Ryan would cut the deficit by cutting spending, would not raise taxes, does not wish to take an axe to military spending, and wants to bring the budget into balance by relying heavily on a plan to convert Medicare into a subsidized insurance scheme that gives individuals control over their own medical budgets. Ryan and his followers believe that American citizens can spend their money better than the government can, and that taxing the rich is counter-productive because of its negative effect on incentives to work, and take the risks involved in setting up a small business. Inequality, they at times quietly say is an incentive to those at the bottom of the ladder to work their way up, and benefits that decouple work from income have a long-term negative effect on the ratio of wealth producers to government dependencies.

There is more, a lot more. Obama would rely on triggers that cut spending if certain deficit reduction targets are not met by 2014, and Ryan on reducing the inflation in health care costs to the lower level of general inflation. The president knows that although he will not have to face the voters in 2014, the Congress he is counting on to swing into action and cut spending will. And Ryan must know that an ageing population will demand increases in health care services that are likely to drive up costs under almost any system of provision.

It is unlikely that a grand bargain, rather than a messy stopgap compromise can be struck during the upcoming debate on raising the $14.3 trillion debt limit, a ceiling that will be hit sometime between May 16 and July 8. That will have to wait for vox populi to be heard in the 2012 election. The president knows he cannot face the voters as a deficit denier or deal wrecker, and the Republicans know that placing all of the burden on those most reliant on government services, while protecting higher earners from any increase in taxes, is likely to push the undecided in the president’s direction.


...is to realize how much of the argument the GOP hasn't engaged yet.


Posted by at April 16, 2011 5:56 AM
  

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