To the editor:
In our ever more dysfunctional political system, discussions about real problems never seem to happen. As a result, neither our problems nor potential solutions are well understood.
For whatever reason – probably because facts are boring and conflict sells newspapers and draws viewership – the media seems intent on casting last weekend’s congressional action as a plus or a minus for one or another of the political parties and individual political figures.
The facts are that, while the legislation raised taxes on some affluent Americans by a bit, it also made the ill-advised tax cuts of 2001 and 2003 permanent for most Americans and did nothing to reduce U.S. government spending. As a result, the deficit will increase by about $4 trillion dollars more during the next 10 years than would have been the case had the Congress done nothing. The entire charade was political theatre, pure and simple.
Federal spending is running at about 23 percent of our gross domestic product (GDP) while our tax system is generating federal revenues of only about 16 percent of GDP. The federal government’s share of Gross Domestic Product – federal revenue as a percentage of Gross Domestic Product – is far below the 21 percent collected by the federal government in 2001 and well below the average collected for the last 60 years.
The notion that we can bring the deficit under control simply by cutting spending is pure fantasy. The big entitlement programs – Social Security and Medicare – can certainly be modestly adjusted, but cannot be substantially changed without repudiating promises on which millions of Americans depend. Moreover, our aging population will be pushing entitlement spending up, thus offsetting our efforts to reduce costs.
We can and should stop acting as the world’s policeman, and having done so, should be able to reduce defense spending substantially. We should demand that the government’s agencies and programs be run more efficiently, but whatever we save will likely be more than offset as interest rates rise and the interest we must pay on our massive government debt increases.