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Making a Progressive Case

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Posted on Jul 10, 2011

By Eugene Robinson

Do progressives care about reducing the national debt? Of course they do, no matter what the White House might believe.

“We think that obviously there are some Democrats who don’t feel as strongly about deficit reduction as [President Obama] does,” senior adviser David Plouffe said Wednesday at a breakfast with reporters and columnists. But that’s not obvious at all. It isn’t even true.

There’s no dispute about where we need to go. The question is what path to take.

Clearly, the federal government cannot continue spending at a rate of 25 percent of GDP while taking in revenues that equal less than 15 percent of GDP, as is the case this year. We would reach the point where debt service crowds out health care, education and other priorities dear to progressives’ hearts. Major investments the nation desperately needs to make—for infrastructure and energy research, for example—would be impossible. Decline would be inevitable.

The way to avoid this dystopian future is to bring spending and revenues more into balance. Yes, there will be some pain and sacrifice. But it is not necessary—nor is it wise—to heap a disproportionate share of the burden onto the backs of the poor, the elderly and the battered middle class.

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What is the alternative? Well, we could begin by recognizing that while spending is too great, in historical terms, revenues are far too meager. We ought to be taxing and spending at roughly 20 percent of GDP, which means that a sensible, equitable, long-term program of debt reduction ought to include spending cuts and revenue increases in roughly equal measure.

Start by allowing the Bush-era tax cuts for households making more than $250,000 a year to expire; this would cut deficits by about $700 billion over a decade. Add in the revenue that would be gained by closing the tax loopholes that Obama keeps talking about—eliminating some deductions for high earners, requiring hedge fund executives to pay taxes at the same rate as their chauffeurs, eliminating the tax break for corporate jets, and so on—and soon you’re in the neighborhood of a trillion dollars.

The nominal corporate tax rate of 35 percent is a joke, since big corporations don’t actually pay that much; those loopholes, too, could be eliminated. Then we could look at measures that would have broader impact—say, hiking or eliminating the income cap for Social Security payroll contributions.

The point is that it doesn’t take much imagination to get within shouting distance of $2 trillion in deficit reduction over 10 years—looking at the revenue side alone. That’s half of the $4 trillion that both Republicans and Obama have set as a target.

There would have to be an equal amount of spending cuts. But what sense does it make to begin with the small slice of the pie—less than 20 percent—that is being called “discretionary” spending? It’s just not possible to find enough savings there.

The drivers of out-of-control federal spending are medical costs and the Pentagon budget. Leave aside health care for the moment and reflect on the fact that military spending has roughly doubled since 2002. Are we twice as safe? Can we really afford to spend two-thirds of a trillion dollars on defense every year?

If we could trim the Pentagon’s spending by 15 percent—I know I’m dreaming, but humor me—we’d save another $1 trillion over 10 years.

Then it would make sense to look at medical costs. Opinion surveys and election results confirm that Americans want a government that provides health insurance for senior citizens and the poor. If this is what we’re going to continue to do, and if we’re not going to break the bank, then we need to take another whack at bringing costs down.

It’s impolitic to mention this fact, but other developed nations manage to produce better health outcomes for roughly half of what we’re paying. They do this through single-payer health systems, many of which deliver care via private health insurance companies. American exceptionalism is to be celebrated when, as in many cases, it gives us an advantage—our traditional openness to immigration, for example. But what’s the point of being exceptional in areas where we’ve clearly fallen behind?

There is, indeed, a way to eliminate these strangling deficits with fairness and an eye toward a brighter future. It just happens to be the progressive way.

Eugene Robinson’s e-mail address is eugenerobinson(at)washpost.com.
   
© 2011, Washington Post Writers Group


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By gerard, July 13, 2011 at 6:19 pm Link to this comment

Good question, tedmurphy41.  To try to answer:

The vast majority of Americans don’t want to hear bad news—unless it’s about somebody else or caused by somebody else.  It’s easier to take a pill, a powder, a smoke or a drink than to actuallly participate in self-government.

For the creative minority of Americans, go to TED.com and watch a couple or three videos to see some pretty wonderful good news you seldom or never hear about.  It’s not really all that far out—just neglected.

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By tedmurphy41, July 12, 2011 at 1:41 am Link to this comment

Do you ever ask yourselves how this financial debt ever came about?
Have any of you asked to see the audited accounts on expenditure, to be placed against income generated, by your Country?
Your Country was up to its eyes in debt long before this latest financial crash and nothing was, apparently, done about it, so why the sudden panic now?

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By shenebraskan, July 11, 2011 at 10:32 pm Link to this comment

Correct and accurate, and of absolutely no interest to Obama or anyone with any clout in DC.

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Not One More!'s avatar

By Not One More!, July 11, 2011 at 5:41 pm Link to this comment

A few years ago, after Charles Hurwitz and his lumber company, Maxxam/Pacific Lumber clear-cutting of old growth redwoods practically destroyed several watersheds in Northern California, the local government mandated negotiations with community members. He/they took only 2 things off the table to be discussed, clear cuts and the use of herbicides. Which happened to be the 2 issues that had to be discussed. Alas, for some reason the negotiations didn’t work out. The company continued to clear cut before going bankrupt, but not before taking 100s of millions of dollars out of the state and leaving impaired watersheds, no jobs, and politicians who take credit for bringing jobs to the area.

Today we see the parties talking about budget, but the crucial issue is off the table, the defense budget. I don’t see a problem.

And, in order to make a good show, medicare will be cut. Isn’t that nice?

If you want republican policies, vote for a democrat.

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By Jim Pharo, July 11, 2011 at 1:33 pm Link to this comment

It’s not just the endless wars and too-low taxes for the rich.  It’s a mythology
that says pain is something to be endured by the powerless, and the powerful
are to be spared even the slightest inconvenience.

In the fall of 2008, I heard NY’s Governor David Patterson explain to a radio
audience why he had called a special session of the legislature to address the
impending fiscal crisis.  He pointed out that there was no question but that
revenues were going to fall off significantly from what was anticipated, and that
there was no need to wait before responding.

This most “liberal” of NY politicians went on to explain that there was $500
million over two years in Medicaid funding that he thought we had to cancel. 
Also, several billion in education funding, including court-mandated payments
to NYC to redress past failures to adequately fund the NYC schools.  Finally, he
felt we could ax something like $250 million from programs for seniors and the
disabled.

But the one thing he knew everyone would agree on was that under no
circumstances could the states hedge fund billionaires and millionaires be
asked to contribute five cents more than they already did.

What I heard that day was a “liberal” Democrat explaining that the costs of the
financial crisis were to be absorbed first by the sick, then by children, the
elderly and the disabled.  But under no circumstances would any of the cost be
born by those who could well afford it.  My head spun as I listened.

This mythology is so firmly rooted—basically, the notion that the needy
deserve to be needy and the successful are to be praised and pampered (a/k/a
afflict the afflicted and comfort the comfortable)—that our society is doomed
to collapse under the weight of our top-heavy elite.

This deficit mania is no different than the Salem witch trials or Saddam’s WMDs. 
It is a complete fiction (as so ably pointed out by today’s Tom Tomorrow
cartoon) engineered by a handful of wealthy and powerful people in a
misguided effort to protect and preserve their wealth and power. 

Sadly, their hubris is just one more of their sins for which the rest of us will
have to suffer.

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mackTN's avatar

By mackTN, July 11, 2011 at 9:24 am Link to this comment

Funny.  Eugene offers a suggestion that clearly defines why we have a deficit in
the first place—

1.  Bush tax cuts for the wealthy (i.e. Bailouts)
2.  Endless Wars

Anything that solves the deficit without addressing those issues is UNFAIR!!! 

Painful sacrifice is already in play, except everyone except the wealthy, including
politicians, is doing the sacrificing.

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By Ben Donahower, July 11, 2011 at 4:40 am Link to this comment
(Unregistered commenter)

If the goal is to reduce or eliminate the deficit both
sides should be open to all means to achieve this goal. 

I think it’s silly to have tackle a problem with one
hand tied behind your back whether it’s the cuts to
program or revenue generation.

In fact, chances are the best option is a mix of these
two tactics.

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