I don't think Orzag's plan is realistic just because it requires compromise and today's politicians signing on to tomorrow's decision. We could have different politicians by the time 2013 gets here or the sensible voices of yore might be trapped in a tough primary and have to stop being sensible (See McCain, Sen. John).
Regardless, I think it's a good thing more and more high-profile policymakers and pundits are saying that we need more revenue. People don't like government spending, but don't want to be without government services. Since we can't privatize everything, we're going to have to start taking in more money to pay for it. Reality sucks, but senior citizens living in poverty, roads and bridges that are crumbling, a pay-to-learn education system, and an ill-equipped military will suck more.
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I don't know which is more worrisome, that Orszag is now dispensing budget advice after presiding over massive deficits or that Democrats are pleading poverty for a federal government that collects about $1.1 trillion in income tax alone. To place that figure in perspective, a mere 20 years ago the federal government had just over $1.2 trillion in total outlays.
However, if tax increases are what Orszag is looking for, I can be of some assistance. The first place the feds could start is with raising taxes on the poor and lower middle class. It's astonishing that 47 percent of households pay zero federal income tax. Everyone should share in the joy of paying income tax, even if it is only a token amount.
The best way to do this is eliminate all tax deductions, including the popular mortgage interest deduction and deduction for state income tax. If you want to take out a big mortage or live in a high-tax state that's fine, just don't ask me to subsidize it.
In any case, the tax discussion is a mere sideshow. The real meat of deficit reduction or elimination is to be found in spending cuts. The country is broke and can no longer afford our big government. That's a discussion, however, that no one seems much interested in.
Where do those spending cuts come from? How politically viable are those options?
Everywhere. A number of departments should be flat-out abolished: Education, Homeland Security, Agriculture, HUD are good starters. Commerce too.
Some of them have legitimate functions within them that could be folded within other cabinet agencies (eg trade negotiators and trade monitors go from Commerce to State).
And of course Defense has to be on the chopping block, big time. Do we really need $665 billion to defend the country?
And last I checked the stimulus still has something like $115 billion in unspent funds -- that's ripe for cutting right there.
As for their political viability, I suppose that in large part depends on how many Tea Party types get elected this November (although in fairness I suspect they will probably be averse to defense cuts).
Hey, at least it's a starting point, which is more than I have seen anyone else offer up.
BTW, according to today's NYT it seems that even Orszag's very limited tax compromise is too much for President Obama to stomach, as he is against extending them for two more years. I expect much kvetching from Washington media types about President Obama being a "Party of No" and unwillingness to engage in compromise to begin momentarily.
I don't think you can call that a starting point. I think that's a wholesale redefinition of the social contract between a government and its citizens.
I also think it ignores nearly 150 years of just US experience that led to the government we have today. Surely you can concede there were noble aims when the Department of Education or HUD was founded? If we have drifted from those aims, the solution would be to right the course, not abolish the departments.
Surely you can concede there were noble aims when the Department of Education or HUD was founded?
I don't judge policies on their intentions, I judge them on their merits (and constitutionality).
Federal involvement in education has been a disaster, and HUD's record is, if anything, worse. Federal involvement in housing has given us the Freddie and Fannie messes, public housing that is synonymous with social disorder, and ill-conceived schemes such as "urban renewal" which were criticized perhaps most notably by Jane Jacobs.
I'll readily conceded that virtually all of the schemes cooked up by the Congress and White House are rooted in the best of intentions. I simply question their wisdom.
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