Torn by Two Visions
Robert J. Samuelson writes in his weekend column posted at Investor’s Business Daily (also available today at the Washington Post) that America is in its “summer of our discontent” because there is one group of Americans (liberals or reactionaries) who “want yet-bigger government to enhance social justice” while the other group (conservatives or radicals) have an “obsession with tax cuts when even today's taxes don't cover today's spending implies radically shrinking government programs that are woven into our social fabric.”
According to Samuelson, “(b)oth visions are unrealistic,” and here’s why says Samuelson:
“Given an aging population — which boosts Social Security and Medicare spending — government is automatically expanding. Since 1971, federal spending has averaged 21% of the economy (gross domestic product); just continuing present programs could easily raise that to 28% of GDP by 2021.
“The liberal-reactionaries can't smoothly finance that. In 2011, the deficit is already twice the entire defense budget. The richest 10% already pay 55% of federal taxes. The blanket embrace of all benefits for the elderly — no matter how rich — will require much higher taxes or steep cuts in other programs, including those for the poor.
“The conservative-radicals are no better. Since 1971, federal taxes have averaged about 18% of GDP. There is no believable plan to reduce federal spending below that level, even with sizable cuts in Social Security and Medicare benefits. So promises of more tax cuts either border on dishonesty or imply huge unspecified spending cuts that would devastate national defense, states and localities, and the poor."
Samuelson saves his heaviest salvo for the nation's politicians, however. He concludes the column by saying:
“Our politicians prefer self-serving fantasies. Democrats won't admit the need for major benefit cuts in Social Security and Medicare; Republicans won't concede the necessity for higher taxes.
“The result is that our leaders are now playing a game of brinksmanship over raising the federal debt ceiling or defaulting. Liberals say spending cuts now would subvert the recovery; conservatives find that an excuse not to cut. Surely a compromise would be phasing in credible future cuts.
“All this from "the world's greatest nation." It lowers our competence and elevates our national embarrassment. Altogether, an unhappy birthday.”
A very explanatory essay of our national divide although I am still not convinced that tax increases are needed. Thank you, Mr. Samuelson. The entire column is well-worth reading.