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The Wrong Tax Debate, the Wrong Tax Policy

September 21st, 2010 . by economistmom

Today I have an opinion piece on CNN.com which doesn’t say anything you haven’t heard me say here before (over and over again!), but it was awfully nice of CNN to invite me to publish it where it will certainly get more eyeballs.  Here’s the opening:

(CNN) — President Obama proposes to let the Bush tax cuts for the rich expire as a way of “saving” $700 billion over the next 10 years. He says that our nation cannot afford those cuts, given the unsustainable outlook for the federal budget and the threat it poses to both our short-term and long-term economic health.

But that savings is just a fraction of the $2.2 trillion cost (without interest) of the generously defined “middle-class” portions of the Bush tax cuts, which President Obama does want to extend.

The president’s choice to continue most of the Bush tax cuts is puzzling. He has repeatedly blamed the Bush tax cuts for the fiscal mess he inherited and rightly points out that they did our economy little good — and a lot of bad — over the past decade.

To the list of examples of deficit-financed fiscal policies that would be more effective at stimulating the short-term economy, I should have added some tax cuts that President Obama can more legitimately call his own, which E.J. Dionne handily reminded me about in his column in yesterday’s Washington Post:

[N]otice that this entire battle is being framed around Bush’s proposals. The parts of the Obama stimulus program that never get discussed — one reason it may be so unpopular — are its many tax reductions.

John Podesta, president of the Center for American Progress and White House chief of staff under President Bill Clinton, noted the Obama tax cuts also expire at the end of this year: “I don’t understand why we’re only talking about extending George W. Bush’s tax cuts, which are heavily skewed to help the wealthiest Americans, yet no one’s discussing President Obama’s cuts, which are exclusively focused on middle-class families.”

I don’t understand it, either. The stimulus included not only the broad Making Work Pay tax cut that gave most families an $800 refundable tax credit but also the child tax credit and the earned-income tax credit, which were especially helpful to lower-income families…

But remember, President Obama’s mistake all along has been putting the failed Bush tax cuts ahead of his own tax policy agenda.  The first time he included an extension of the Making Work Pay tax credit in his first budget (for fiscal year 2010), he proposed a permanent extension with its costs to be offset with revenues from auctioned carbon permits (climate change policy).  Well, that didn’t go over so well with Congress (including Democrats in Congress), once they realized that such a climate change policy was actually intended to raise revenue.  As soon as it became clear Congress wouldn’t support that offset, the President backed away from his proposal, claiming that because it was in place until the end of 2010, he would have some time to revisit the proposal later.  Meanwhile, he has continued to propose deficit-financing the permanent extension of $2 trillion worth of the Bush tax cuts which have always been scheduled to (also) expire at the end of 2010.  I’ve never understood why President Obama repeatedly jettisons his own policies in favor of his predecessor’s (by his own label) “failed” policies.

Incidentally, in the President’s latest budget submission for fiscal year 2011, he proposed just a one-year extension of the Making Work Pay tax credit, this time deficit-financed under the umbrella of policies intended specifically as “stimulus” (which to work properly should be deficit financed).  But the proposed extension of the “middle-class” Bush tax cuts is still included as part of the Obama “current policy” baseline and is still permanent and still fully deficit financed.  No justification needed.

I’m not claiming that a permanent, deficit-financed extension of President Obama’s Making Work Pay tax credit would be a good tax policy for the long run.  But that’s not what President Obama ever proposed.  He did it right: he first proposed permanent extension fully offset as a longer-term tax policy, and then (when that didn’t work) proposed a temporary, deficit-financed extension as stimulus.  And in terms of stimulus, a temporary extension of a refundable tax credit like the Making Work Pay credit would be more effective in terms of economic “bang per buck” than any extension (temporary or permanent) of the “middle-class” Bush tax cuts–and far less harmful to the longer-term fiscal outlook.

I’m asking (yet again) why does President Obama refuse to hold the Bush tax cuts up to the same standards as his own policies?  I (like E.J. Dionne and John Podesta) just don’t get it.  He’s never really liked the (”failed”) Bush tax cuts that much, right?

____________________

**Addendum (2 pm):  Here’s CQ’s Richard Rubin’s take on it (subscription required).

34 Responses to “The Wrong Tax Debate, the Wrong Tax Policy”

  1. comment number 1 by: Shannon Jeffries

    Why are you so opposed to taxpayers keeping more of the money that they earn? And why aren’t you criticizing Obama for growing the size of government, as opposed to cutting it back? We are heading down the same path of Greece, and we now have a situation where 52% of the people in this country are paying for everything. I’ve worked my rear-end off to get where I am, and never once did I expect someone else to pay my way. I’m tired of being asked to pay more in taxes to support a bloated, socialist federal government. It’s time for the other 48% to start being responsible for them themselves and quit living off of my dime!

  2. comment number 2 by: Gerald Prante

    Note: The congressional Democrats’ plan includes extending two tax provisions in ARRA, the same two as Obama built into his “baseline adjustment.”

    These include the lowering of the refundable child credit threshold to $3,000 (from $12,800) and expanding the EITC range for joint returns.

    These provisions are not part of the Republican plan, S. 3773, however. The Republican plan would extend only the Bush tax cuts (w/ an AMT patch and $10 mill exemp & 35% rate on estates).

    See here: http://www.mytaxburden.org/parameterstable.htm

    Other ARRA provisions are not included in the congressional Democrats’ plan (PAYGO statute) but are in Obama’s 2011 budget, such as new refundable education credits, the additional EITC for 3-dependent returns, and Making Work Pay (one-year extension).

    This topic of MWP is interesting because peoples’ paychecks will still be lower in January (relative to December) even if the Bush tax cuts are extended because MWP is going away. If people notice, will they blame Obama?

  3. comment number 3 by: AMTbuff

    >it was awfully nice of CNN to invite me to publish it where it will certainly get more eyeballs

    Uh oh, there goes the neighborhood. ;)

    I wonder when the press will begin to notice that although the Bush tax rates are about to expire, AMT relief expired last January, and nobody is discussing extending it to 2010, let alone 2011. If 20M taxpayers owe that extra $4000 six months from now, the fur will really fly!

  4. comment number 4 by: Ron

    I notice how you include throwing more money at the problem. Since you seem to do the homework that supports your position, get the information on where the initial stim money went, I would love to see a truthful breakdown. Remember the 112 million for 55 saved jobs? Was one of those jobs yours? Throwing more money at the problem hasn’t worked for the public school system and will not work for the federal government. How can the leaders and decision makers from Freddie and Fannie still have jobs or influence? I am tired of the Democrat versus the Republican smoke screen. This is about people in power doing whatever they can to keep it and at anyone’s expense. People are tired of people like yourself not telling the whole truth about what you are talking about. How is it not racist that over 93% of the black people in America voted for the black candidate? If 93% of white people did that we would never hear the end of it, but in the end 50% of white people voted for either candiate.
    the true solutions are simple. We can no longer have the foxes protecting the hen house. Most people in political power are attorney’s. Every judge is a former attorney yet even at the Supreme court we get numerous 5 to 4 decisions. We could do the same with just about any 9 12th grade students. So the hen house with Fannie and Freddie is protected by foxes. Our constitution(henhouse) is surrounded by foxes and a piece is missing each passing day. Cry all you want but everyone but Fox is presenting a strong left view. Twenty five years ago, I was a college student that thought equality for all socially, I mean why not? Then I matured and lived in the real world. We need to get rid of color. It is the first tool used against the masses to control the masses. We need to eliminate black history month but we need to celebrate the history of blacks as we do every other race, including white. We need to disassemble the “free ride” car. If you are poor, want to have sex, get pregnant, then you have every right to. What you shouldn’t have is a right for me and others to pay for you and your child. If you don’t finish your FREE public education through highschool, you should get nothing from the citizen who paid for you to have a free public education. We have to help people who want to help themselves. Not in any country should the citizens be responsible for those who do nothing for themselves. It’s called sacrifice. Our government and the leaders of minorities are telling people they are entitled to everything instead of doing the things to earn them. They want to give to the cancer(keep it quite) instead of making the cancer change and become productive to the body. This is control.
    America is broke and you want to throw more money to people who have mismanaged the first 800 billion. For road repair? Really? How about supporting businesses and industries that get Americans to MAKE things here is America. Will our government ever get tough with importers? No, because if China sell our treasury notes or stops buying them, the financial system will fail. Oh no! You mean we would take steps back but be rid of our dependency? Sounds like what we do for our AA and drug dependent citizens. But you and i are not part of that game. You will not make a difference until you get to the truth. Then again, if that truth benefits you, you will be no different from those who keep the masses at bay. Just ask this administration or even Carl Rove, us masses are just to to to stupid (that was a stutter) and need to be farmed for our own protection.

  5. comment number 5 by: AMTbuff

    IMHO, anyone who uses the term “masses” is at minimum an elitist, and quite possibly a racist. He is guaranteed to be close-minded due to heavy indoctrination of some sort. Again, just my opinion.

  6. comment number 6 by: Brooks

    Here’s one way in which the mass confusion over Social Security’s “finances” get in the way of smart policy: Cutting payroll taxes is (I think) generally regarded as one of the most stimulative forms of tax cuts, yet an objection one hears is that it would worsen the “insolvency” of Social Security…as if the concept of Social Security “solvency” (or “insolvency”) were actually meaningful, as opposed to the reality — the rational view — that we’ve got overall revenues and overall spending and overall deficits, and bookkeeping internal “deficits” are meaningless.

  7. comment number 7 by: Ron

    AMTbuff,

    IMHO, you have no clue who or what I am. Your opinion is an attack on a person instead of dealing with the truth. When I used “masses”, it was with sarcasm. Since I am for the elimination of race as a mechanism for people such as yourself to use to divide and control american citizens, you need to use a personal attack to avoid dealing with the real issues. Heavy indoctrination…like what is being spewed out by the major networks? What is being put into our k-12 textbooks? What far left political science professors at our colleges and universities preach? Failure does not discriminate? Stupidity and laziness does not discriminatebut it does seem to gravitate to people who think they are entitled and do little or nothing for themselves or other americans.
    By the way, wake up!

  8. comment number 8 by: AMTbuff

    >When I used “masses”, it was with sarcasm.

    In that case, I apologize. Please use scare quotes next time to show readers that you are ridiculing users of a buzzword rather than embracing the concept.

    To other readers, I should clarify what I mean by elitist. An elitist is one who believes that a large portion of the public is so incompetent that wiser people, including of course the elitist, should make the important decisions for everyone. Government is the tool to achieve the result of improving the human condition by forcing people to do things. History shows us that this ends very badly, mostly because human beings are in charge of the government.

    In addition to ignoring history, elitists fail to appreciate the ability of ignorant people to make good decisions. Each person has a network of people who have more knowledge about a given subject and can help with decisions. Furthermore, collective decisions by a large group can be remarkably accurate even if most of the individuals in the group are ignorant. This is somewhat mysterious, but it’s real.

    Elitism is mostly about the feelings of the elitist. It feels good to be making a positive difference for one’s fellow man. The problem is that the policies embraced by elitists hurt the public in the long run.

  9. comment number 9 by: Gipper

    Brooks,

    I completely agree with you. I view payroll taxes as part of the overall income tax schedule and lump SS in with all the other expenditures.

    However, Keynesians believe in stimulative powers of payroll tax cuts because they disproportionately go to lower-income earners with higher consumption multipliers.

    Also, it is helpful to segregate SS and Medicare, and Medicaid as the 3 basket cases leading us to financial ruin. However, earmarking their line item on our payroll stubs for fiscal analysis is not conceptually helpful as you point out.

  10. comment number 10 by: Gipper

    Economistmom,

    I notice that you mention the “failure” of the Bush tax cuts, but you neglected to mention the failure of Medicare Part D, No Child Left Behind, the wars in Afghanistan or Iraq, the agricultural subsidies, Fannie and Freddie subsidies, etc.?

    Why?

    Why are there no failures in spending programs? Why no recommendations for spending cuts?

    The Concord Coalition for Tax Increases. No wonder nobody takes you or the coalition seriously regarding reduction of deficit spending.

  11. comment number 11 by: Brooks

    Gipper,

    I must say I find it both amusing and annoying whenever I see someone on the right characterize the Concord Coalition as simply seeking tax increases or someone on the left saying Concord simply wants to slash Social Security or something along those lines.

    It’s similar to how both the delusional and impractical, hyperpartisan right and the delusional and impractical, hyperpartisan left both attacked and fought against — and defeated — Congressional efforts to set up a commission to try to solve/mitigate the problem of our long-term fiscal imbalance.

    The power of selective attention perception never ceases to amaze me.

  12. comment number 12 by: Gipper

    Brooks,

    If you could cite examples of Economistmom and Concord Coalition specifically calling for cuts in entitlement spending or any other significant progams, then that would be more impressive than your “amusement.” I mean with the same specificity that they’ve shown in their attitude toward the “Bush Tax Cuts.”

    I’m not seen the same energy from Economistmom and/or the Concord Coalition dedicated to spending cuts as I’ve seen for tax increases.

    My recommendations could never be characterized as hyper-partisan right or even right-wing in this climate. I recommend a 2030 target for federal percentage of GDP that is an average of the 2007-2008 FY percentage and the current CBO percentage of GDP projection for 2030, and balancing the budget by then.

    Neither Economistmom or Paul Ryan would go for that plan. So what does that make me? I’d say it makes me a moderate between Economistmom and Concord Coalition fairly partisan left and the Paul Ryan Heritage Foundation fairly partisan right.

  13. comment number 13 by: Brooks

    meant just “selective perception”

  14. comment number 14 by: Brooks

    Gipper,

    I wasn’t commenting on your recommendations or what they indicate about you. I haven’t read your recommendations (simply due to very limited blog reading time for me lately), so I can’t comment.

    As for your challenge, I don’t have time to do research for you, but I’m sure if you did some research you’d find evidence of Concord and EconomistMom warning of the projected long-term costs of entitlements and generally addressing that part of the problem in a similar manner as they address the revenue side of the problem. So at least look for this on the Concord website, and search here on EconomistMom site on keywords related to entitlements. Feel free to report back on what you find out — and if your reporting doesn’t seem to reflect a good faith effort to find such positions/commentary, hopefully someone here will point you to what you supposedly missed.

  15. comment number 15 by: Ron

    “selective perception” I love it.
    AMT, in your view, is O’bama an elitist? Now, back on topic. I listen to Beck, watch his show when I have the time, and then do a little research on my own. Every citizen in this country receives services from the government. Anyone reading on this site knows that. With that simple truth, that the federal government was created to provide for the common defense, etc., everyone in the United States should be paying something for those services. As far as income is concerned, No one should pay less less than 5% of earnings to the federal government and no one should be paying more than 15%. Whatever those numbers need to be within that range can be debated but everyone should be paying for the services everyone gets. The next problem is how far do we go with our social programs? The current administration and those with power behind the scenes want the country to go all the way to socialism as they maintain and grow their power base in the changing economic system. How do you conquer America without going to war? Economics baby!
    Why won’t the tax code ever get “fixed”? Then the federal government and other “institutions” lose control. What will H&R block do along with thousands of accountants if the tax rate was a simple and straight forward 10%? Your wages are $100,000 then you owe the Feds $10,000. You make $10,000 then you owe $1,000. For the states, the cap should be somewhere between 2 and 4 percent. You live and earn in the USA, then you pay. You live in the USA and don’t earn, then you are entitled to opportunity and freddom for the pursuit of life, liberty, and happiness, just not at everyone else’s expense.
    So we have the name of “Bush tax cuts” “O’bama tax breaks” blah blah blah, what are things asteriods were naming? The simple problem we have is that people feel that the money the governement collects and then spends is waste and spent in the best interests of the citizens. Did any of you read where some of the money from the stimulus went? Some of the research projects are just beyond any common sense.
    Americans want the problem Kiss’ed. Keep it simple stupid. The problem under that premise is that then we no longer need PAC’s and unions and the list goes on.
    Ok, I am tired. So many problems, so little time.

  16. comment number 16 by: Gipper

    Brooks,

    Economistmom and Concord Coalition use the “warning about the long-range problem of entitlement spending” as a cudgel to agitate for tax increases.

    I’ve not read a single thing from Economistmom that recommends spending cuts (other than defense) with the same specificity as her recommendations regarding tax increases. I won’t claim that my research has been exhaustive because, like you, my blog reading is limited while I earn a living.

    However, if Economistmom or anyone else can show me something I’ve overlooked, then I’d be happy to rescind my claims.

    My point is that the Concord Coalition and Economistmom talk a good deficit-hawk game. Their view is that due to the aging population, federal expenditures will continue to increase and that taxes must increase to close the deficit. Maybe, their plan for expenditures won’t rise as fast as the far left would like, but that doesn’t mean Economistmom is a centrist because left-wing looneys yell at her.

    It’s not explicitly in their literature, but I can read between the lines.

    Now that’s a political position. It’s not a technocratic, non-partisan position. It’s not even a constructive, compromise-inducing position to take. It’s one geared toward continuing the political stalemate.

    Someone on the left has got to start talking seriously about cutting government expenditures before Paul Ryan is going to begin talking about increasing taxes.

  17. comment number 17 by: Brooks

    Gipper, you really should spend 10 minutes on Concord’s site and make a good-faith effort to find clear evidence of Concord emphasizing that entitlements per current policy is unsustainable. Really — do I have to do your homework for you? See what you can come up with in 10 minutes if you’re really trying. I’d rather not have to spoon feed it to you.

  18. comment number 18 by: SteveinCH

    Brooks,

    I’m with Gipper on this one. I just went to the Concord blog and clicked deficit and you know what, every single featured post was about taxes except for one about the ACA which said it didn’t do enough.

  19. comment number 19 by: Brooks

    Gipper,

    Took me a whole 2 minutes on Concord’s site to come across this from Executive Director Bob Bixby:

    Put simply, we have promised ourselves an array of future retirement and health care benefits that is unaffordable…

    It is true that no immediate crisis is confronting Social Security. Nor is an immediate crisis facing Medicare and Medicaid - the other two large entitlement programs for the aged. Yet, a broad bipartisan consensus exits that these three programs are on an unsustainable course. No one can say exactly when a crisis will hit, but by the time it does we will have likely burdened the economy with a debilitating amount of debt; leaving painful benefit cuts and steep tax increases as the only solutions. Waiting for this gut-wrenching outcome, knowing full well that is coming, would be an act of fiscal and generational irresponsibility on a grand scale.

    That’s 2 minutes worth of good-faith searching on Concord’s site. I guess that’s 2 minutes more than you put in to fact-check your claims.

  20. comment number 20 by: Brooks

    Oh, and the link http://concordcoalition.org/publications/2005/0203/future-social-security-statement-robert-l-bixby-executive-director-senate-spe

    Want to know how hidden away it was? Just go to Issues, then click Social Security, and you’ll see the above link.

  21. comment number 21 by: SteveinCH

    Identifying problems is not the same as offering solutions now is it.

  22. comment number 22 by: SteveinCH

    Oh and that link is from 2005

  23. comment number 23 by: Brooks

    Steve,

    First, that was just a tiny sample of strong statements by them that we cannot continue with current entitlement policy — that’s what “unsustainable” means: we must change policy so projected spending on those programs comes down substantially.

    Second, let’s keep apples to apples in terms of advocating particular policies. Although I don’t know yet if/how much things will change with the “Solutions Tour”, Concord has not been the kind of advocacy group that advocates for specific policies. So if you’re going to point to a lack of advocacy for “solutions” on the spending side and claim that they are really only/mainly pushing for tax increases, you need to show that they have advocated more strongly for what you are defining as “solutions” on the tax side, as opposed to speaking of the revenue side of the problem in similar terms as they have spoken of the spending side.

    I think that’s one area in which selective perception kicks in.

    Re: 2005, I’ll assume you’re correct, but so what? It’s right there on their website under Issues in the Social Security section. Not sure what your point is if that’s what they are communicating presently via their website. In any case, again, it’s just a tiny sample.

  24. comment number 24 by: SteveinCH

    To be honest, I’m more referring to economistmom the blog than Concord. I agree that Concord has done little on the solutions side on either taxes or spending.

    My issue is here. The posts here are almost entirely about tax increases other than the ACA which was a spending increase and supporting the toothless and ridiculous version of PAYGO that Congress passed.

  25. comment number 25 by: Brooks

    Well, I was mostly responding to Gipper’s remark to Diane:

    The Concord Coalition for Tax Increases. No wonder nobody takes you or the coalition seriously regarding reduction of deficit spending.

    That said, I think it’s still an unfair statement with regard to EconomistMom. I’m not saying there is a perfect balance here, but I think Gipper goes overboard at best.

    Also, in case it’s not clear to anyone, any imbalance would reflect a leaning or imbalance of emphasis by Diane, not Concord.

  26. comment number 26 by: SteveinCH

    Your last sentence I agree with, not the one previous. There really is very little here on spending. As I said, the only substantive spending discussions I can remember were about the ACA (which actually increased spending) and statutory PAYGO which was to put it mildly, useless.

  27. comment number 27 by: Gipper

    Brooks,

    I went to Google and typed in “Economistmom + spending cuts” and “Concord Coalition + spending cuts.” Couldn’t find anything that contained specific recommendations for spending cuts that matched Economistmom’s specificity regarding tax increases.

    You quote: “Put simply, we have promised ourselves an array of future retirement and health care benefits that is unaffordable…”

    How is pointing out that a problem exists equivalent to recommending a solution? As I said earlier, Economistmom and Concord Coalition use the specter of the looming deficit as a cudgel to agitate for tax increases as the PREDOMINANT means of closing the deficit gap.

    And that means that they are not a really serious force for the kind of compromise that will be necessary to actually reach an agreement to reduce the deficit. Economistmom even said that she doesn’t believe the voters really want spending cuts so she dismisses them as being a major source of savings.

    You have to be wading deep into the fever swamps of Washington DC Democrat budget inside baseball not to see the bias oozing out from all over this blog and the Concord Coaltion.

    Question: how many employees at the Concord Coalition are former Republican budget staffers? How many are Democrat?

  28. comment number 28 by: Brooks

    Gipper,

    You seem like someone trying really hard not to try.

    You Googled this and that and supposed found something-er-other? But you won’t simply go to Concord’s website and see what they are saying? Are you kidding me? And then you present the same “solutions” argument that I just addressed in response to Steve (re: apples-to-oranges)?

    Again, go to Concord’s site, and see the nature of their comments about the revenue side and about the spending side. Of course, to at least some significant extent you’ll probably “see” what you want even there in terms of some imbalance of emphasis, advocacy of “solutions”, etc., but at least that would represent a serious challenge to your selective perception.

    If you’re going to continue to insist on your characterization and ridicule of and attempt to discredit Concord, go ahead and take 20 minutes to try to make a good-faith effort to lay out the strongest statements you see on the Concord site re: the spending side, then do the same for the revenue side. And report back with links (or quotes and links ideally). You probably won’t, and if you do it you’ll probably offer the strongest statements by them on the revenue side and far from the strongest on the spending side, hoping others won’t actually make a good-faith effort and report back to show that you presented a bogus review.

  29. comment number 29 by: Gipper

    Brooks,

    I’ll give you an example of where Concord Coalition failed in its mandate to focus on reducing the deficit. They should have been screaming from the rooftops against adoption of Obamacare. While the CBO says it reduces the deficit by $100 Billion over 10 years, creating an additional entitlement program is not the way to go about significantly closing the deficit. Any taxes raised by Obamacare could have been devoted entirely to reducing the deficit by a far larger amount, in the absence of the additional spending.

    Did Economistmom or Concord Coalition stand up and shout that Obamacare was a stupid idea, with the same vigor that has been directed to the Bush Tax cuts? Hell no.

    It’s their incremental deficit morality. It’s Ok to increase spending as long as you increase taxes. When they should be saying, Whoa! Let’s stop increasing spending. Let’s cut spending and devote any new taxes to seriously reducing the deficit.

    They accept the status quo welfare state and essentially recommend raising taxes to pay for it.

  30. comment number 30 by: SteveinCH

    Gipper,

    Let’s be clear, Concord is institutionally focused on deficits, not spending or taxes per se. You and I agree on the ACA and how it should have been looked at; however, I will say looking at it based on deficit impact is a legitimate way of looking at it. Was Concord, at least by my reading, insufficiently skeptical of the savings claims and overly optimistic about the options created by demonstration projects? I’d say yes but again this lies within the realm of debate.

    Said differently, you and I both have an issue with people who think that a deficit reduction based on increasing spending while increasing taxes more is the same as one that is reached by holding spending and increasing taxes a little or cutting spending and leaving taxes alone. Doesn’t mean either is right or wrong but it is a different conceptual model.

    There are other examples of these different conceptual models and I don’t think you can credibly argue that one side is right and the other wrong on most of them.

  31. comment number 31 by: Gipper

    SteveinCH,

    Agree with everything you said. And my admonition to Economistmom and Concord Coalition is that Democrats and Republicans will not reach a compromise with a “marginal deficit reduction” moral compass.

    If they’re trying to raise consciousness and push parties together, they’re doing a lousy job.

    If a deal is going to be made, then Democrats will have to come forward with entitlement cuts and Republicans will have to come forward with reciprocating tax increases.

    Otherwise, Republicans are going to be content with being a deficit-spending party increasing net interest costs and crowding out non-debt spending. It’s how they win elections. They won’t win elections recommending spending cuts and then have Democrats demagouging them into defeat.

    Something similar to the British Conservative/Liberal coalition agreement to reduce spending and raise revenue is our only hope. I don’t see how the Concord Coalition and Economistmom are moving us in that direction.

  32. comment number 32 by: AMTbuff

    It appears that me that the staff of Concord are split in the same way that Democrats and Republicans are. Thus Concord as a whole can neither push Democrats toward benefit cuts nor push Republicans toward tax increases. A coherent message is not possible when the staff itself is divided.

  33. comment number 33 by: Jim Glass

    Thus Concord as a whole can neither push Democrats toward benefit cuts nor push Republicans toward tax increases. A coherent message is not possible when the staff itself is divided.

    It is possible, if the staff is united on the particular message — and that message should be “there is a problem coming! a BIG problem!!”

    Forget the solutions at this point. They are premature. Nobody is going to consider solutions seriously *until* enough of the public at large realizes the problem. And today 60% of the public is totally oblivious, with most of the rest partisanly divided between: “No problem, we can always raise taxes enough to pay for everything” and “No problem, if we cut taxes and don’t let the govt expand we’ll just grow out of this”.

    There’s a reason why *only* Ryan has come out with a long-term fiscal proposal, and why although dozens of SS reform proposals have been scored by the SSA actuaries as being actuarially sound, none has come anywhere near to serious Congressional consideration, much less a vote.

    Even supposedly fearless Krugman weenied out of giving his SS reform proposal after promising to deliver one a a while back. When reminded he still dodges: it’s such a small problem I don’t have to. Ha! But what else can he do — by arithmetic he has to propose either a tax hike or a benefit cut, and no matter how “small”, with an election coming he’d get killed by his own side for doing either. So who else is going to do it?

    No “solution proposals” are going to arrive until a large and growing part of the population believes in a coming crisis and wants something done about it.

    The public doesn’t believe it now because both parties bury and deny the issue (else how could they keep campaigning to cut taxes/increase spending?) leaving only public interest groups to educate people — and, for reasons I just put in my other “boring” comment, IMHO they aren’t doing such a good job.

    An example: A while back S&P published a big report with a graph showing the credit rating of the US plunging to “junk” during 2017-2027. Well, if you are a budget/fiscal crisis watch group, isn’t that a *great* visual aid?! Shouldn’t it or an updated version of it be right on the front page of your web site, greeting visitors with a picture of the real big issue as they arrive?? But … silence and darkness, everywhere.

    I only heard of the report through an expensive subscription to Tax Analysts, then had to go hunt it down myself. I’ve never seen the graph anywhere (except on my own old blog). Why not?

    Meanwhile, Concord’s front page is covered with “Concord in the News”, about itself, and when I tried out its interactive exercise I’m asked tough trade-off questions like, do I want to reform military tricare. What??

    In short, IMHO, the message everyone who cares — Concord, Peterson, etc. — should be sending out is “PROBLEM COMING! …PROBLEM COMING! …” And it should be explained in terms bus drivers understand: “YOUR TAXES are going way up, or YOUR BENEFITS are going way down, or most probably BOTH, unless you address these facts NOW”. Market those ideas like direct mailers do. Pound them.

    Focus on *that*. And it’s all true, so shouldn’t everyone at these groups agree about this? Is this not why these organizations exist?

    Market the truth of the *problem* to both political sides in a non-partisan manner — don’t let them deny it.

    Solutions today are surplusage. Worry about them later.

  34. comment number 34 by: SteveinCH

    How long would you like to do this for Jim? Concord has been doing it for more than a decade. Peterson similarly. So what?

    Yelling “The British are Coming” after they’ve already shown up doesn’t seem a compelling thing to do.