Friday, January 14, 2011

Republicans Need To Show Leadership In Cutting The Deficit

A new poll out shows that 71% of Americans are against raising the debt ceiling. They do not, however, want to cut the debt. Andrew Pavelyev explains.
Well, there’s a strong consensus at least for some cuts – 73% want to cut foreign aid. Alas, only a fraction of one percent of the federal budget is spent on foreign aid. So cutting it, while risking seriously destabilizing the Middle East, would not put a dent in the deficit.
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So, what does the government actually do with all that money it borrows from China? Why, it uses it to cover millions of Social Security checks it sends out every month (has there ever existed a sounder retirement system anywhere in the world?). In fact, if we did not have Social Security and Medicare, we would be quickly paying down the national debt right now. So, the public that supposedly does not want the national debt to increase any further must surely be willing to cut entitlements, right? Well, not exactly. 20% support cutting Social Security and 23% support cutting Medicare. In other words, there’s no serious evidence that even a quarter of voters really care about the deficit – rather than just giving it lip service. 
Another poll in December showed that Americans want to reduce the deficit, but none of the nine most mentioned methods for decreasing the deficit garnered majority support.  The problem is that Americans don't understand the nature of the federal budget. That is why raising the debt ceiling is unpopular. Conservative historian Bruce Bartlett correctly explains the debt ceiling bogeyman.
It is also convenient for demagoguing. And, believe me, this is absolutely bipartisan. For example, in 2006, when the debt limit was increased, both Joe Biden and Barack Obama, both members of the Senate at that time, opposed the increase with the usual demagoguery -- "How dare we pass these debts on to our children -- but of course now the shoe is on the other foot. The basic thing is that the debt ceiling simply allows members of Congress to avoid responsibility for their own actions. They can increase spending and cut taxes and in the process increase the deficit and then express outrage when the logical consequences of their actions require the Treasury to borrow more. It gives them a free vote; they can go back to their constituents and say I voted to control the debt by not increasing the debt limit. And some people are foolish enough to buy this stuff.
You should read the rest of Barlett's piece to fully understand the severe danger in refusing to raise the debt ceiling. But regardless, Bartlett's point is that taking a stand against raising the debt ceiling is not taking a stand against the debt.

This is also why conservatives have focused their attention on earmarks (less than 2% of the federal budget), instead of big spending items like entitlements and the Defense budget. On Neil Cavuto's show, Mitch Daniels stated the obvious.
"Let me just say: I think we pay too much attention to it. The fiscal problems facing this country won't be fixed by earmarks, and it's a little bit of a distraction to spend as much time as we do [talking about it]."
Since the elections in November, Republicans have voted and supported bills that would increase the deficit - the Bush tax cuts, repeal of health care reform - and against one bill that would decrease the deficit - the Dream Act. There may be profound reasons for those positions, but if Republicans are serious about deficit spending, then they will have a straight conversation with the American people about the federal budget. The American people will not want to hear them. But I guess that is why Republicans need to show leadership.

Who among the candidates vying for the nomination will show that leadership?

4 comments:

John said...

You're a breath of fresh air Pablo :) Medicare and Social security will have to be cut, somehow.

In Sweden, we would have cut social security for high income earners and possible the middle class as well. Maybe let the poorest 25 % keep it.

That's what we did (or something similar) when our system collapsed about 10-15 years ago. Now, pensions are privatized and while the state provides you with a minimum pension (that's based only partly on earlier income), you're pretty much on your own and have to invest money in government-approved investment funds if you want to have a decent living standard even after you retire. A certain percentage of your salary goes to these funds - you may choose what funds you want to invest in yourself, but you cannot withdraw the money or invest them in investment funds that hasn't been approved by the authorities.

/John

OhioJOE said...

"Republicans have voted and supported bills that would increase the deficit - the Bush tax cuts, repeal of health care reform - and against one bill that would decrease the deficit - the Dream Act." Wow, just wow. While the rest of the post has some good points. This paragragh suggests that your grasp of economics is questionable.

Anonymous said...

It's good to know that Mitch Daniels is willing to talk honestly about what needs to be done. While I don't think he has a great chance right now of winning the nomination, I hope Romney is willing to make the same mature statements.

Zaloom

Pablo said...

"This paragragh suggests that your grasp of economics is questionable."

My grasp of economics is questionable. I am not economist, much less a good one. I have a basic understanding of economics. Therefore, I usually try to get the opinions of economic experts. In this case, the CBO. So that is where that paragraph comes from. Now, OJ, if your "grasp of economics" is much better than mine, then I am waiting patiently for your explanation of how that paragraph is false.