Reactions and Proactions to libs and cons and poli-pundits of all sorts.
Tuesday, July 26, 2011
Question for Conservatives re: Debt Plans
If the conservative goal is to cut the deficit without raising taxes, I would like for any conservative to tell me what, exactly, there is in the Reid/Obama proposal that they oppose?
My biggest problem with it is that it isn't nearly big enough. We are alredy winding down Afghanistan and Iraq, which account for over a third of the savings in Reid's plan (even more because he included these cuts in his "interest savings" figures), so those aren't new cuts. So really the plan is closer to $1.5 Trillion in new cuts. Over 10 years. That's paltry, and the credit rating agencies won't fall for it.
The current plan floated by Boehner isn't really any better, but it does have some teeth in it to at least insure the cuts actually get implemented.
The real problem here is that the leadership of both parties is failing to address our spending problem in any kind of serious way.
If I was in Congress, I would not vote for any debt ceiling increase without a plan that balances the budget within 5 years. (In otherwords, I would not vote for either the Republican or Democrat plans as currently configured) If our creditors cut us off, that is no different than a balanced budget amendment, which I have supported for years.
Well, Eric - If memory serves me, Obama wanted a grand bargain that would shave 4 trillion off the deficit over ten years, but he wanted a ratio of 3/1 in terms of cuts to revenue increases. That's much more significant, but Republicans simply refuse to entertain ANY form of revenue increase to deal with the deficit. I, frankly, think that such a position is irresponsible. Regardless how we got to the point where we are, there is simply no possible way to balance the budget without some form of spending cuts (even in the sacrosanct entitlement programs) AND revenue increases.
And even still, the good is not the enemy of the better. Even smaller, but significant deficit cutting is much better, wouldn't you agree, than nothing at all (and certainly better than the fiscal impacts of a debt default)?
Also, Eric - Saying that it's not enough is not the same as saying that you oppose it. My question is specifically to ask conservatives what is it in the plan itself that merits the opposition of conservatives.
"there is simply no possible way to balance the budget without some form of spending cuts (even in the sacrosanct entitlement programs) AND revenue increases."
I'm not so confident in the accuracy of this statement. It seems entirely plausible to me that tax hikes, especially on the wealthy who already pay the vast majority of taxes in America, could end up causing government revenues to decrease as they sink businesses who are now operating on the margin, and cause the wealthy jump ship and businesses to redouble their efforts to offshore revenue. There is no way to know which side of the Laffer curve we are on, and in a shaky economy it is just too risky to raise taxes. The focus should be on cuts. If the cuts were deep enough (we're talking $7 or $8 trillion over 10 years before I'd support it), then I might be willing to go along with some attempts at revenue enhancement, if they were regressive in nature (everybody sacrafices income, not just the rich), and if they were set up so that they were only triggered *after* significant cuts had been implemented.
With that said, I did like the aspect of the Simpson-Bowles recommendation that did away with most tax deductions while also significantly lowering tax rates across the spectrum. But of course both Democrats and Republicans widely criticized Simpson-Bowles.
And while I do agree with you that significant cutting is better than nothing at all, $1.5 trillion over ten years is not really significant in the face of our current deficit. $4 Trillion isn't really all that much over 10 years either. Unless they can get the numbers up around $6-$10 Trillion, I think the entire conversation is just election year political sophistry on both sides. Only a small handful of our politicians have the political will to do what is necessary to fix our fiscal problems, and the rest are just playing hot potato with the issue, hoping when the whole thing blows up the other side will look more guilty. I think the fact that the current plan is too small is an excellent reason to oppose it... the best reason, in fact.
"There is no way to know which side of the Laffer curve we are on, and in a shaky economy it is just too risky to raise taxes."
By the same token, I could say that in a shaky economy is it too risky to massively cut social safety net programs. The fact is that we have a debt problem AND a shaky economy. Where is the willingness to try significant cuts and marginal revenue increases? Republicans are even opposed to revenue increases by making the tax code flatter and simpler! Where's the sanity in that? The fact is that this is going to be painful all the way around. The economy will suffer regardless of whether its by tax increases alone or by spending cuts alone. A responsible path is some measure of both. And I don't see why a 3:1 ratio of spending cuts to tax increases is so objectionable.
"Where is the willingness to try significant cuts and marginal revenue increases?"
I'm unwilling because I believe taxes are too high, both for myself and for the uber-wealthy. There isn't anyone I'm willing to ask to pay more in taxes, except maybe those who have income and don't currently pay any tax on it. Get tax rates down to around 8% and I'll be willing to talk about raising them.
"Republicans are even opposed to revenue increases by making the tax code flatter and simpler!"
And the Democrats are only interested in doing so as a means of increasing revenue, they refused to endorse the Simpson-Bowles plan that would have flattened taxes, simplified the code, and given people a tax cut to make up for the fact that their deductions were being taken away.
"And I don't see why a 3:1 ratio of spending cuts to tax increases is so objectionable."
Fair enough, encourage your Congressman to support such a plan. I find it highly objectionable and will continue to try to influence my Congressmen to reject it. In the end, one side or the other will win out. That's the problem with the current debate: we have two sides with two fundamentally differnet perspectives on and expectations of government. Everyone keeps trying to say they should find a comfortable midle ground, when what really needs to happen is for one side to win and the other side to lose. I'd like my side to win, but I'd rather see them lose than to continue to split the difference again and again and again.
Eric - As for winning and losing, that's all fine and dandy; but our system is not designed to allow for the victory of absolutes. The filibuster, the veto, the constant fact of divided government, etc., all points to a reality, constructed by our founding fathers, that no one side gets to win in absolute terms by happening to secure a simple majority against the desires and aspirations of the minority. What we are likely to get in the end, without any measure of willingness to compromise, is nothing but the status quo ante. And that would be sad because both sides acknowledge a need to do something about the spiraling debt. So, intransigence means the country loses.
My biggest problem with it is that it isn't nearly big enough. We are alredy winding down Afghanistan and Iraq, which account for over a third of the savings in Reid's plan (even more because he included these cuts in his "interest savings" figures), so those aren't new cuts. So really the plan is closer to $1.5 Trillion in new cuts. Over 10 years. That's paltry, and the credit rating agencies won't fall for it.
ReplyDeleteThe current plan floated by Boehner isn't really any better, but it does have some teeth in it to at least insure the cuts actually get implemented.
The real problem here is that the leadership of both parties is failing to address our spending problem in any kind of serious way.
If I was in Congress, I would not vote for any debt ceiling increase without a plan that balances the budget within 5 years. (In otherwords, I would not vote for either the Republican or Democrat plans as currently configured) If our creditors cut us off, that is no different than a balanced budget amendment, which I have supported for years.
Well, Eric - If memory serves me, Obama wanted a grand bargain that would shave 4 trillion off the deficit over ten years, but he wanted a ratio of 3/1 in terms of cuts to revenue increases. That's much more significant, but Republicans simply refuse to entertain ANY form of revenue increase to deal with the deficit. I, frankly, think that such a position is irresponsible. Regardless how we got to the point where we are, there is simply no possible way to balance the budget without some form of spending cuts (even in the sacrosanct entitlement programs) AND revenue increases.
ReplyDeleteAnd even still, the good is not the enemy of the better. Even smaller, but significant deficit cutting is much better, wouldn't you agree, than nothing at all (and certainly better than the fiscal impacts of a debt default)?
Also, Eric - Saying that it's not enough is not the same as saying that you oppose it. My question is specifically to ask conservatives what is it in the plan itself that merits the opposition of conservatives.
ReplyDelete"there is simply no possible way to balance the budget without some form of spending cuts (even in the sacrosanct entitlement programs) AND revenue increases."
ReplyDeleteI'm not so confident in the accuracy of this statement. It seems entirely plausible to me that tax hikes, especially on the wealthy who already pay the vast majority of taxes in America, could end up causing government revenues to decrease as they sink businesses who are now operating on the margin, and cause the wealthy jump ship and businesses to redouble their efforts to offshore revenue. There is no way to know which side of the Laffer curve we are on, and in a shaky economy it is just too risky to raise taxes. The focus should be on cuts. If the cuts were deep enough (we're talking $7 or $8 trillion over 10 years before I'd support it), then I might be willing to go along with some attempts at revenue enhancement, if they were regressive in nature (everybody sacrafices income, not just the rich), and if they were set up so that they were only triggered *after* significant cuts had been implemented.
With that said, I did like the aspect of the Simpson-Bowles recommendation that did away with most tax deductions while also significantly lowering tax rates across the spectrum. But of course both Democrats and Republicans widely criticized Simpson-Bowles.
And while I do agree with you that significant cutting is better than nothing at all, $1.5 trillion over ten years is not really significant in the face of our current deficit. $4 Trillion isn't really all that much over 10 years either. Unless they can get the numbers up around $6-$10 Trillion, I think the entire conversation is just election year political sophistry on both sides. Only a small handful of our politicians have the political will to do what is necessary to fix our fiscal problems, and the rest are just playing hot potato with the issue, hoping when the whole thing blows up the other side will look more guilty. I think the fact that the current plan is too small is an excellent reason to oppose it... the best reason, in fact.
"There is no way to know which side of the Laffer curve we are on, and in a shaky economy it is just too risky to raise taxes."
ReplyDeleteBy the same token, I could say that in a shaky economy is it too risky to massively cut social safety net programs. The fact is that we have a debt problem AND a shaky economy. Where is the willingness to try significant cuts and marginal revenue increases? Republicans are even opposed to revenue increases by making the tax code flatter and simpler! Where's the sanity in that? The fact is that this is going to be painful all the way around. The economy will suffer regardless of whether its by tax increases alone or by spending cuts alone. A responsible path is some measure of both. And I don't see why a 3:1 ratio of spending cuts to tax increases is so objectionable.
"Where is the willingness to try significant cuts and marginal revenue increases?"
ReplyDeleteI'm unwilling because I believe taxes are too high, both for myself and for the uber-wealthy. There isn't anyone I'm willing to ask to pay more in taxes, except maybe those who have income and don't currently pay any tax on it. Get tax rates down to around 8% and I'll be willing to talk about raising them.
"Republicans are even opposed to revenue increases by making the tax code flatter and simpler!"
And the Democrats are only interested in doing so as a means of increasing revenue, they refused to endorse the Simpson-Bowles plan that would have flattened taxes, simplified the code, and given people a tax cut to make up for the fact that their deductions were being taken away.
"And I don't see why a 3:1 ratio of spending cuts to tax increases is so objectionable."
Fair enough, encourage your Congressman to support such a plan. I find it highly objectionable and will continue to try to influence my Congressmen to reject it. In the end, one side or the other will win out. That's the problem with the current debate: we have two sides with two fundamentally differnet perspectives on and expectations of government. Everyone keeps trying to say they should find a comfortable midle ground, when what really needs to happen is for one side to win and the other side to lose. I'd like my side to win, but I'd rather see them lose than to continue to split the difference again and again and again.
Eric - As for winning and losing, that's all fine and dandy; but our system is not designed to allow for the victory of absolutes. The filibuster, the veto, the constant fact of divided government, etc., all points to a reality, constructed by our founding fathers, that no one side gets to win in absolute terms by happening to secure a simple majority against the desires and aspirations of the minority. What we are likely to get in the end, without any measure of willingness to compromise, is nothing but the status quo ante. And that would be sad because both sides acknowledge a need to do something about the spiraling debt. So, intransigence means the country loses.
ReplyDelete