…or not… I’ll hear about it either way today (Wednesday) at an event here in DC called “Progressives and the National Debt” hosted by the Center for American Progress and the Center on Budget and Policy Priorities. On that conference website you can see the impressive lineup of experts who will be speaking, and you can watch the event live (8:30 am to 1:45 pm).
I’m not sure what the consensus “progressive view” of the dangers (or not) of deficits and debt will be, but I’ve always believed two main factors make the “progressive case” for deficit reduction:
- Deficit financing of government spending or tax cuts typically involves a more “regressive” burden than the distribution of the alternative means of financing via tax increases or even (well-considered) benefit cuts. The burden of the federal debt via compounded net interest grows faster than the overall economy (the definitionof “unsustainable”) and especially faster than the growth in incomes for lower-to-middle-class households, and “backed-into-a-corner fiscal discipline” is more likely to resemble a sledgehammer that hits all Americans very broadly (and indiscriminately) rather than a fine-tuned set of policies that better targets the burden to those who can most afford it.
- The overall tax-and-transfer system is progressive by income level–that is, the rich tend to receive net negative transfers (on net, pay taxes) over their lifetime, while the poor tend to receive net positive transfers. (For lower-income households, incomes after federal taxes and transfers exceed incomes before taxes and transfers.) If the (progressive) federal tax-and-transfer system is on a fiscally unsustainable path, then the (progressive) federal tax-and-transfer system might not be sustained.
But we’ll see what the experts say. I may have to try some “tweeting” from my seat in the audience! (Oh, boy…)