Now, i'm not saying that we do not have a major deficit problem. We do. WE REALLY REALLY DO. Just ask former U.S. Comptroller General and Head of the Government Accountability Office (GAO) David Walker. He held this job under Clinton just around the time that we built up the huge surplus and continued to hold the job under Bush when we lost it completely (not to point fingers). Walker says that the crisis has to do with the fact that politicians have promised literally trillions of dollars worth of middle class entitlements to Americans ever since the Great Depression. At the time, programs such as social security and (later on) Medicare, among others, seemed at least somewhat financially sane because old people didn't survive very long and there weren't very many of them. There weren't many seniors as compared to the number of people in the workforce that would be paying for these programs with their income and pay roll taxes.
Then there was a anomaly that began right after world war II: the baby boom. All of a sudden, a goddamn huge amount of babies were born because of all these soldiers coming home ready to start families and such. That was 60-ish years ago.... now that huge population of people is just starting to require social security and Medicare. If it seemed like a financial burden on the government before, now these entitlements are practically insane.
In addition, there are other problems with government that are causing this deficit, some that tends to peeve conservatives and some that tend to peeve liberals. Conservatives hate the fact that public-sector unions are bleeding the system dry through (comparatively) high salaries, pensions, and benefits. Liberals hate the fact that the wars in Afghanistan and Iraq are costing the tax payers hundreds of billions of dollars (in fact that number has just recently passed a trillion).
Our deficit problem IS real; however, the real question that we have to ask each other is how we would like to deal with it. Do we want to deal with it now, during a recession (or actually a period of very slow recovery) when the country is still stumbling and fragile, at a time when it is actually very important that the government spend money because nobody else really can? It's an odd question: what do we prize more, long-term economic stability? or long term economic stability? If we forget about the fragility of the economy right now and decide to cut government spending, the recession will jump on us again (because consumer spending is way down and the government is the only body that can really effect growth right now) and it won't go away any time soon. If we forget to fix the deficit, it will literally bleed the entire nation dry of its life blood in the long term, to the point that in thirty years all of our combined tax money will barely be able to pay the INTEREST on the debt that we've built up.
California is a state with a hell of a load of debt. In fact, the state of California is facing a budget deficit this year of $19 billion. In order to deal with this, Governor Arnold "Governator" Schwarzenegger decided recently to cut the pay of almost all state administrators from $20 an hour to minimum wage ($7.25 roughly, I believe). That might help... But it won't really. The state is a great example of the problem with this country... we love for governments to do things for us but we do not want to pay for them. In California, the state has a lot of jobs given to it by the people. One job that has virtually been taken away from the government is tax collection. This state has had huge tax cuts in the past few decades, largely because the public votes on them in referendums. GREAT IDEA.
Liberals and Conservatives alike have to realize something very important about reality. To liberals i say this: the government can't do everything for everyone. Maybe some government can (sweden...) but definitely not this one in its current condition. It is so large and wasteful that any entitlement has become a fiscal anvil to carry around. Conservatives, however, have to realize something just as if not more important: the government can't do nothing! The government has certain jobs in the modern world, jobs that may have not existed in 1776 but jobs that must exist now in order to protect the people, and jobs that COST MONEY. We have been tricked into thinking that tax cuts will pay for a deficit. If conservatives want to pay for the deficit, they have to become realistic about raising taxes at some point (which by the way is another way to get us back into a recession, but they don't seem to care much about that).
If conservatives do not believe it is their job to spur job creation (which is exactly what Sharron Angle, the Republican running against Harry Reid in Nevada, said recently), then that is all good to me. I just want them to raise taxes already so that can balance out this deficit. Cutting spending won't do it because there are things in this country that are literally impossible to cut: conservatives will never cut defense spending, liberals will never cut welfare spending... etc etc. Because we are in this conundrum, the only solution to skyrocketing deficits is tax increases. Just think about this, in the 1950s, the top tax rate was 90% on the extremely rich. 90%!!!! Now its no more than 35 or maybe 40%, while our government has grown larger and larger and with usually good reason.
A lot of left-leaning economists would definitely disagree with what i've just said. Paul Krugman (nobel prize winning economist and New York Times columnist), for instance, believes that the fact that we are focusing on our deficit is the wrong move to take and that we need to continue focusing on stimulus. The conservative talking point to that is that we are mortgaging our children's (well, my) future. In reality, it isn't quite that simple. If we don't get the economy to grow now, "our children" won't have any money at all. These economists argue that this is the time for stimulus, and when the economy is totally back on track (WHICH RIGHT NOW IT IS NOT), then we can fix the deficit. We'll raise taxes and people will be able to pay them just like during the late Clinton Years.
Hmmmmmmm.....
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