Wednesday, April 13, 2011

The Fiscal Future

People should understand that the budget debate is not in any way about the deficit. The Democrats have a better track record over the past three decades, and a more credible plan, for reducing the deficit. Republicans are not proposing any more deficit reduction than Democrats. As the President said in his speech at GWU today, the Republican vision "is less about reducing the deficit than it is about changing the basic social compact in America." Let's have an honest debate about that.


  1. There are three likely scenarios with the Republican budget.

    Scenario 1 is that they purposely made the cuts deeper than they actually want, knowing that they would eventually have to compromise. Boehner has already taken flak for not immediately reducing the budget by $100b like he and others promised, so that shows me that they are actually willing to compromise. This would be excellent political strategy, as it would make them look pragmatic, and they could always shift the blame on the Democrats for making them compromise. Ideally, the compromise would actually work, and only the hard core fringe conservatives would complain.

    Scenario 2 is that they never thought that the Democrats would actually agree to reforming these programs, and the Republicans decided to go at a bass-akwards approach. That is sort of the approach that John Kasich is taking here in Ohio, but I think he's going about it in a better way. The idea is that you defund these programs to what you think the most efficient operating cost is, and that forces them to operate more efficiently. Reform takes time, and the Republicans apparently are antsy. Kasich is going about it a bit differently. Although he's making the cuts, he's also going to provide consultative resources to local governments to help them work more efficiently.

    Scenario 3 is that they are amoral, don't care about the poor or the elderly, and actually believe in the Tea Party crap and only want to benefit the wealthy.

    I don't think scenario 3 is the likely option. If they do whole-heartedly believe in the budget proposal, and support of it isn't just politicking as usual, then they must believe that what they're doing is going to help America. We can say that they just want to screw us all over and get richer, but they know that they will screw themselves if they make the American economy worse.

  2. Maybe there is a scenario 4, or a variant of 3, that would give Republicans a bit more benefit of the doubt. Suppose we assume Republicans care about doing something for the poor and elderly, but they have faith that the market will provide solutions for them. So they think if they turn Medicare into a voucher program and freeze spending, that somehow the private insurance market will step up and provide just as good coverage for them. Democrats believe, with good reason I would say, that that approach would end up throwing a lot of people into the cold, and they would end up paying a lot more out of pocket or just go without medical care. But if we assume that Paul Ryan is acting in good faith, then he sincerely thinks that the market will provide. That means he is not amoral, just misguided, or maybe deluded.

    People should understand that this debate is all about Medicare. Sure there is another debate about increasing taxes versus even more drastic spending cuts in other programs, but that is peanuts compared to the Medicare (and Medicaid) issue. That's where all the money is. I would argue that the Republican approach is simply to slash spending on Medicare without coming up with a solution for providing people with adequate care. That means people will have to pay for it themselves or do without. The Democrats are trying to come up with a way of cutting spending while still providing adequate care. That means we have to figure out how to incentivize doctors not to call for unnecessary or ineffective treatments. Moderate Republicans like yourself should be pleased that practically no one is calling for just increasing payroll taxes enough to pay for the current system and its projected increasing costs in future years. Everybody is trying to figure out a way to reform it.

  3. Oh for cripes sake, this cinches your delusional behavior.