Brooks: Fiscal Flop

[L-Boy]

This op ed captures pretty damn near 100% how I feel on this issue and this anemic compromise.

http://www.nytimes.com/2013/01/01/opini ... -flop.html

Another Fiscal Flop
By DAVID BROOKS

Over the course of the 20th century, America built its welfare state. It was, by and large, a great achievement, expanding opportunity and security for millions. Unfortunately, as the population aged and health care costs surged, it became unaffordable.

Public debt as a percentage of gross domestic product was around 38 percent in 1965. It is around 74 percent now. Debt could approach a ruinous 90 percent of G.D.P. in a decade and a cataclysmic 247 percent of G.D.P. 30 years from now, according to the Congressional Budget Office and JPMorgan.

By 2025, entitlement spending and debt payments are projected to suck up all federal revenue. Obligations to the elderly are already squeezing programs for the young and the needy. Those obligations will lead to gigantic living standard declines for future generations. According to the International Monetary Fund, meeting America’s long-term obligations will require an immediate and permanent 35 percent increase in all taxes and a 35 percent cut in all benefits.

So except for a few rabid debt-deniers, almost everybody agrees we have to do something fundamental to preserve these programs. The problem is that politicians have never found a politically possible way to begin. Every time they tried to reduce debt, they ended up borrowing more and making everything worse.

So Congress and President Obama set up the “fiscal cliff,” an artificial disaster scenario that would force them to do the right thing. Obviously, the fiscal cliff negotiations were not going to lead toward the deep structural reforms that will eventually be needed. But they could have begun the reform process.

They could have shown the world that the two parties can work together to avert the eventual calamity. They could have produced a balanced program that would have combined spending cuts and targeted tax increases. They could have reduced Medicare spending on the rich to free up more money for young families.

President Obama and Speaker John Boehner both earnestly wanted to achieve these things. But the deal we are heading toward is discouraging. Yes, the deal does raise $600 billion in revenue over 10 years from a tiny sliver of the population (compared with the $8 trillion in new debt likely to be accrued over that time).

But the proposal is not a balance of taxes and spending cuts. It doesn’t involve a single hard decision. It does little to control spending. It abandons all of the entitlement reform ideas that have been thrown around. It locks in low tax rates on families making less than around $450,000; it is simply impossible to avert catastrophe unless tax increases go below that line.

Far from laying the groundwork for future cooperation, it sentences the country to another few years of budget trench warfare. There will be a fight over drastic spending cuts known as sequestration, then over the debt limit and on and on.

The White House envisions a series of stages bringing us closer to fiscal sustainability. I hope that’s right. But if Congress couldn’t make a single tough decision under these circumstances, why should we think it’ll make any further down the road? More likely, there will just be more squabbling and brinkmanship, more posturing and punting, which would not only poison future budget talks but also prospects for immigration reform, tax reform, gun control and many other projects.

Whom should we blame for this? Again, we should not blame Obama and Boehner. In their different ways, they and a number of other people in the Congress are trying to find a politically palatable way to deal with these hard issues. They got what conditions allowed.

Ultimately, we should blame the American voters. The average Medicare couple pays $109,000 into the program and gets $343,000 in benefits out, according to the Urban Institute. This is $234,000 in free money. Many voters have decided they like spending a lot on themselves and pushing costs onto their children and grandchildren. They have decided they like borrowing up to $1 trillion a year for tax credits, disability payments, defense contracts and the rest. They have found that the original Keynesian rationale for these deficits provides a perfect cover for permanent deficit-living. They have made it clear that they will destroy any politician who tries to stop them from cost-shifting in this way.

Most members of Congress are responding efficiently to the popular will. A large number of reactionary Democrats reject any measure to touch Medicare or other entitlement programs. A large number of impotent Republicans talk about reducing the debt, but are incapable of forging a deal that balances tax increases with spending cuts.

The events of the past few weeks demonstrate that these political pressures overwhelm the few realists looking for a more ambitious bargain. The country either doesn’t know or doesn’t care about the burdens we are placing on our children. No coalition of leaders has successfully confronted the voters, and made them heedful of the ruin they are bringing upon the nation.

[AugustaGator]

Why do I get the impression you want to continue the free lunch?

I know a lot of your reactions are reflexes against some of the crap the repugs spew, but there is a theme, at least from my perspective, that you think the gov't can provide these levels of services and through gov't is the only solution.

Maybe I am wrong. I'd like to think we as a society could agree, individually, to provide....

[catsigator]

We'd have been better off going over the cliff and not doing anything about it.

[RebelGator]

America is a land of opportunity.....where else could you have a ***** for a mother, a drunk communist for a father, never work a day in your life, and become enormously wealthy.

[EVGator]

America is a land of opportunity.....where else could you have a ***** for a mother, a drunk communist for a father, never work a day in your life, and become enormously wealthy.

Your lawn mowing business must be doing pretty darn good, Rebel. Looks like there are advantages to this global warming after all. But you're too darn modest. Sitting on a riding mower can't be called never working. Or do you get your help to do everything and you just sit back and rake in the cash?

[DetroitGator]

Stupid & doomed!

[Bammer]

We'd have been better off going over the cliff and not doing anything about it.

When the debt markets finally send us over the cliff, it's giong to be a hell of a lot uglier than a mild recession induced by the congressionally imposed fiscal cliff.

It may take two decades a la Japan, but eventually our debt costs will skyrocket and the Fed will really crank it up and create massive inflation, or we'll declare bankruptcy.

What a f-ing disaster. We're worse than Europe about kicking the can and it's on both sides of the aisle.

[DetroitGator]

We'd have been better off going over the cliff and not doing anything about it.

When the debt markets finally send us over the cliff, it's giong to be a hell of a lot uglier than a mild recession induced by the congressionally imposed fiscal cliff.

It may take two decades a la Japan, but eventually our debt costs will skyrocket and the Fed will really crank it up and create massive inflation, or we'll declare bankruptcy.

What a f-ing disaster. We're worse than Europe about kicking the can and it's on both sides of the aisle.

When a "Fiscal Cliff" results in what is effectively a spending bill, you know we are doomed!

[Bammer]

We'd have been better off going over the cliff and not doing anything about it.

When the debt markets finally send us over the cliff, it's giong to be a hell of a lot uglier than a mild recession induced by the congressionally imposed fiscal cliff.

It may take two decades a la Japan, but eventually our debt costs will skyrocket and the Fed will really crank it up and create massive inflation, or we'll declare bankruptcy.

What a f-ing disaster. We're worse than Europe about kicking the can and it's on both sides of the aisle.

When a "Fiscal Cliff" results in what is effectively a spending bill, you know we are doomed!

Perhaps I HAD a bit more faith than you, but that is completely gone. Congress can't get its act together and we'll pay the price.

I hope we get a fiscal conservative in office in 2016, maybe a Chris Christie type. And Romney was not a fiscal conservative, for anyone who wants to argue that.

[DetroitGator]

We'd have been better off going over the cliff and not doing anything about it.

When the debt markets finally send us over the cliff, it's giong to be a hell of a lot uglier than a mild recession induced by the congressionally imposed fiscal cliff.

It may take two decades a la Japan, but eventually our debt costs will skyrocket and the Fed will really crank it up and create massive inflation, or we'll declare bankruptcy.

What a f-ing disaster. We're worse than Europe about kicking the can and it's on both sides of the aisle.

When a "Fiscal Cliff" results in what is effectively a spending bill, you know we are doomed!

Perhaps I HAD a bit more faith than you, but that is completely gone. Congress can't get its act together and we'll pay the price.

I hope we get a fiscal conservative in office in 2016, maybe a Chris Christie type. And Romney was not a fiscal conservative, for anyone who wants to argue that.

I just don't think they can help themselves... all of them are career politicians and the 3 people effectively negotiating this on behalf of the 500+ others are all people that have been in office their entire adult lives...

Completely detached from any reality other than maintaining their own power/fiefdoms.

[CivilGator]

What the hell are you people talking about? They did such a great job they all got a raise!!

[ReelGatorDoc]

A bunch of clowns in Congress and led by the Head Clown in the White House.

just living in la la land

[DetroitGator]

A bunch of clowns in Congress and led by the Head Clown in the White House.

just living in la la land

And every one of the elected by us, so what are we?

[CC GATOR9]

Why are you Libs complaining? You elected Obama.

[ReelGatorDoc]

Sure could use a leader that actually could lead

just have to deal with another 4 yrs of different agendas

will be a constant battle

my prediction is that we will finish these 4 yrs, deeper in debt, with so practical solution for fiscal accountablity. Then we'll really need a leader who leads and doesn't just blame and keeps missing the point. It's still the economy. That will take a back burner until the next debt ceiling "crisis".

[catsigator]

Sure could use a leader that actually could lead

just have to deal with another 4 yrs of different agendas

will be a constant battle

my prediction is that we will finish these 4 yrs, deeper in debt, with so practical solution for fiscal accountablity. Then we'll really need a leader who leads and doesn't just blame and keeps missing the point. It's still the economy. That will take a back burner until the next debt ceiling "crisis".

Are we capable of electing such a person?

[AugustaGator]

Sure could use a leader that actually could lead

just have to deal with another 4 yrs of different agendas

will be a constant battle

my prediction is that we will finish these 4 yrs, deeper in debt, with so practical solution for fiscal accountablity. Then we'll really need a leader who leads and doesn't just blame and keeps missing the point. It's still the economy. That will take a back burner until the next debt ceiling "crisis".

Are we capable of electing such a person?

Nope, our own self interests prevent it. We are not wise enough to know better.

[L-Boy]

Why do I get the impression you want to continue the free lunch?

I know a lot of your reactions are reflexes against some of the crap the repugs spew, but there is a theme, at least from my perspective, that you think the gov't can provide these levels of services and through gov't is the only solution.

Maybe I am wrong. I'd like to think we as a society could agree, individually, to provide....

Not really sure where you got that impression.

I have been railing against the long term structural deficit far before it was popular for tea party republicans to do so. I have ALWAYS stood for structural legislated LONG TERM deficit reduction - VIA higher tax revenues through either modestly higher ACROSS THE BOARD tax hikes, and/or via tax reform (which is really easier said than done) - and also through structural entitlement reform leading to lower long term entitlement spending. I was advocating Simpson Bowles before anybody else knew what the hell it was.

I guess there is still a chance for something substantial given the coming next fiscal cliffs - the debt ceiling and sequestration deferral.

it just sucks in that this was maybe a once in a decade chance to get some real revenue increases, and Obama folds for an increase of merely $60 billion a year, less than 5% of the annual deficit. We really should have had increases about 3 to 4 times that much.

I have never been too uptight about the short term deficits.

[ncargat1]

Sure could use a leader that actually could lead

just have to deal with another 4 yrs of different agendas

will be a constant battle

my prediction is that we will finish these 4 yrs, deeper in debt, with so practical solution for fiscal accountablity. Then we'll really need a leader who leads and doesn't just blame and keeps missing the point. It's still the economy. That will take a back burner until the next debt ceiling "crisis".

Are we capable of electing such a person?

Yes.

Does that candidate exist?

[catsigator]

Sure could use a leader that actually could lead

just have to deal with another 4 yrs of different agendas

will be a constant battle

my prediction is that we will finish these 4 yrs, deeper in debt, with so practical solution for fiscal accountablity. Then we'll really need a leader who leads and doesn't just blame and keeps missing the point. It's still the economy. That will take a back burner until the next debt ceiling "crisis".

Are we capable of electing such a person?

Yes.

Does that candidate exist?

That person may exist, but he or she will never get nominated by either of the two major parties.