Take off the rose-colored glasses. Stop listening to the cable-news shows. Stop believing you can have your cake and eat it too. Our deficits are real. Are they about to kill us? No, not really. It's time we accept reality though:We have come to believe a story about the deficit that is largely not true.
It’s a comforting story, to be sure. It holds the promise of a painless solution, because it suggests that the country’s huge looming deficits are not really our fault. Instead, they seem to stem from weak-willed politicians, wasteful government programs that do not benefit us and tax avoidance by people we have never met.
In truth, the coming deficits are a result, above all, of the fact that most Americans are scheduled to receive far more in Medicare benefits than they have paid in Medicare taxes. Conservative and liberal economists agree on this point. After Medicare on the list of big, growing budget items come Social Security and the military.
The three programs are roughly as popular as tax increases are unpopular – which is precisely why solving the deficit problem will be so difficult.
And here in lies the problem. Nobody likes deficits. Everyone likes balanced budgets. Nobody likes government spending. Nobody likes taxes. Everybody loves spending cuts to other people. Everybody likes tax increases on other people. Just don't touch their lives.
This is what is all wrong here. You see, it's hard to maintain the best standard of living in the world, or even one of the top ones. It takes sacrifices. While everyone wants to check out and live their lives as free of outside meddling as possible, everyone also wants that "outside" to provide. Well, it can't. There are choices to be made. More revenue, less spending, or both? Neither isn't an option.
When given an actual choice, people do make decisions.
And if you really want to find reasons for optimism, you can do so in the public opinion data. When Americans are given a set of realistic choices, they are perfectly willing to prioritize.The GOP lead Congress is not speaking this way to America, and President Obama has not made this clear enough. Something has to give. President Obama has ineffectively explained how his programs will lower the deficit. To his credit, he convened a commission that brought back an unpopular report to him- but it's something to work with. The GOP has tried to sell us a batch of bad goods- that $100 billion in cuts from discretionary spending will somehow do anything to our problems. It won't. The problems aren't hard, but they have to be dealt with, within the framework of reality.
The poll’s respondents, for example, said they would rather cut military spending than Medicare or Social Security (and several bipartisan groups have made specific suggestions for doing so). If Medicare and Social Security must be changed, people prefer increasing payroll taxes on high-income households or raising the Medicare eligibility age – not cutting back on Social Security paychecks or Medicare treatments. Within the tax code, a reduced tax break for mortgage interest looks more palatable than a reduced tax break for health insurance.
From a purely economic perspective, the deficit remains a manageable problem. Some smaller government programs truly are wasteful and could stand to be cut. Relatively modest changes to Social Security – like raising the eligibility age or starting to subject some income above $106,800 to the Social Security tax – would eliminate its shortfall. Military spending could be cut significantly and still be much greater than in the past or much greater than in any other country.Funny- sounds a little like the Budget Commission report?
Even Medicare and Medicaid don’t look intractable. After all, every other country in the world, including some that get medical results as good as ours over all, spends far less on health care than we do. It is possible.
