Friday, December 3, 2010

Growing Up

"But I am saying that Bowles, Simpson, and everyone else involved in the 'adult conversation' are going to have to sell it by convincing people that, for them personally, there's an upside as at least as much as a downside to reducing the deficit."
Stan Collender, Attention Bowles And Simpson: You've Got To Talk About More Than The Pain
With all due respect to Mr. Collender, the constant quest for personal upsides is exactly what got us into this mess in the first place. The whole reason why the deficit reduction conversation is happening is a dawning realization that the steady parade of "tax cuts, prescription drug coverage for Medicare, contracts from the government, corporate subsidies, and research grants" funded by borrowing from overseas creditors can't go on forever, if for no other reason that eventually the accumulated interest will demolish our ability to keep even basic functions running.

But I understand the political reality that he's referencing, and it's a bleak one. The American public, taken as a whole, is simply too short-sighted to understand that a (reasonably) soft landing now or in the near future is substantially better than a (potentially catastrophic) hard landing later - especially when there are people out there willing to sell us the idea that the hard landing will magically never come. Just the other day, I heard someone tell the BBC that the Bowles - Simpson plan was bad medicine because it didn't take into account future economic growth that would substantially increase tax revenues, as if this wonderful period of expansion were a guarantee graven in stone.

The "adult conversation" that we're looking for can't be predicated on the idea that we're entitled to a certain standard of living, regardless of our collective ability to fund it. But for right now, it seems it will be, simply because that's what get's people elected. According to Representative Jan Schakowsky of Illinois: "The Bowles-Simpson plan further erodes the middle class and threatens low-income Americans." But I fail to understand how letting the status quo continue until financial reality runs it down shores up the middle class and removes threats to low-income Americans. If these groups are, in effect, reliant on government handouts to support themselves, what will they do when taxes are increased and services cut back? Even if the United States simply walks away from its debts, spending will still have to plunge to match receipts. It seems unlikely that the poor and middle-class will still be able to rely on government programs in such an event. Given this, it simply doesn't seem reasonable to set any sort of direct personal benefit as the price of agreeing to no longer live beyond our (collective) means. Allowing the discussion to be sidetracked into what payoffs are going to be required to end the current payoffs will do nothing but indulge a childish impulse that threatens to reduce the United States to a destitute shell. So, if anything, the "adult conversation" that Bowles and Simpson want to have is imperiled just as much by a lack of other adults to converse with, as anything else.

Perhaps this is the real reason Why Fixing the Budget Is Hopeless, even if it must be admitted that the average person's complete lack of understanding of it plays a major role...


Keifus said...

I have no problem with the idea that the allocation of collective effort should support some standard of living. In fact, that's really the only moral argument that exists to justify government (although we can find other arguments to explain it)--we do better for the group working together than we do on our own. If it fails to ensure an effective standard of living, then what the hell is it good for? Reasonable people can argue just how successful any of it is in practice.

But look, some groups are for ensuring a standard that keeps certain businesses and populations--that is, themselves--in select exposure to extremely lucrative opportunities. This is pretty expensive when it comes to tax cuts and bailouts and interest free lending, and exclusive financial rules. Other groups suggest that a standard ought to involve a fair allocation of wealth for worthwhile contribution to its creation, or for not dying of starvation and disease when you're no longer able to labor. ("Redistribution" is a dirty word, but a discussion of what effort is worth what compensation is inevitable.) These are also not cheap, and medical costs particularly are projected to only grow. We can make a moral or economical comparison of those two proposed standards of living. In practice, however, group A is getting theirs, at the increasing expense of group B.

But I can't disagree that any such standard ought to be a sane function of how much there actually is to go around. And I tend to agree that we shouldn't budget on an assumption of perpetual growth. The problem is that tax cuts and certain corporate subsidies are the priority regardless of the rationale of the day.

Aaron said...

Very true, very true. To the degree that the public has come to see itself as entitled to an unsustainable standard of living, dependent on tax cuts and corporate subsidies to maintain that standard, and unconcerned where the money comes from, we have a very real problem.