Right Thinking From The Left Coast
The price of anything is the amount of life you exchange for it - Henry David Thoreau

Wednesday, November 10, 2010

Simpson-Bowles

It’s out:

A presidential commission’s leaders proposed a $3.8 trillion deficit-cutting plan that would trim Social Security and Medicare, reduce income-tax rates and eliminate tax breaks including the mortgage-interest deduction.

The plan would throw out hundreds of tax breaks for items such as capital gains and child care. It would raise the gas tax, slash defense spending and bring down health-care costs by clamping down on medical malpractice suits. The Social Security retirement age would rise to 68 in about 2050 and 69 in about 2075.

Now we’re going to see who is full of shit and who meant what they said about the deficit.  This is about what I expected to come out of the deficit commission.  Is the Tea Party serious about debt?  Or are they going to cave in the seniors?  Are the Republicans serious?  Or will they balk at the tax increases?  The Democrats we know our full of shit.  AARP and the AFL-CIO have already denounced the plan, so you know the Democrats will be all wobbly.

Come on, guys.  Show what your made of.  If you don’t like this, propose an alternative that balances the budget.  Because the alternative is catastrophe.

Update: We’re seeing two kinds of reactions.  The Left is apoplectic, even thought they’ve clearly not read it carefully.  Krugman calls it unserious because it caps revenues at 21% of GDP, which is higher than in recent years.  Firedoglake goes nuts about the Social Security cuts, even though its mostly cutting them for affluent seniors.  Pelosi has declared it DOA having apparently gotten her marching orders from special interests.  Only Ezra Klein is somewhat receptive, which is not surprising as he’s usually intellectually honest about these things.

What’s encouraging, however, is the positive response I’m hearing from much of the Right and center.  Boortz thinks its a good starting point.  Ponnuru is optimistic, as are several NRO columnists.. Sullivan is almost giddy.  And in recent days, a large slate of Republicans have expressed an openness to cuts in defense spending. (Grover Norquist is, unfortunately, still being idiotic).

Sullivan is saying that this is “Obama’s moment”, his chance to pivot politically and potentially address one of the most important issues of our time.  It’s also the GOP’s moment—to show that they finally “get it”, that they are serious about getting the deficit under control.  Even it means passing something unpopular that will get them unelected in two years.  Right now, for the next few minutes at least, I have a tiny spark of optimism.

Update: Much more from McAardle:  Money quote:

Progressives are going to have to accept that this isn’t going to be all, or even mostly, done with tax increases.  The comparisons to European nations being bandied about are silly.  For starters, unlike, say, Sweden, America has really substantial state and local spending, which limits how much the federal government can tax and spend.  According to the Census, in 2008 state and local governments spent $2.8 trillion, of which about $2 trillion were operating expenditures.  That same year, the US government spent about $3 trillion.  US government spending at all levels is now over 40% of GDP. 

In America, I don’t see how this number is going to go to 50% without some sort of fiscal cataclysm, and no, I don’t care how awesome Sweden is.  Twenty-one percent of GDP is well above the historical average of the last 50 years, indeed, it’s well over what we’re taking in now, or will take in when the Bush tax cuts expire.  Meanwhile, state and local taxes are going to have to go up, because of pensions and other mandatory spending.

Posted by Hal_10000 on 11/10/10 at 10:34 PM in Politics   Law, & Economics  • (0) TrackbacksPermalink
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