Matt on long-term deficits

Link here

How to deal with long-term deficits is, of course, complicated and controversial. And yet it’s also in a way quite simple. We need to reform health care to slow the cost growth of Medicare and Medicaid. We need to steadily reduce defense spending as a share of GDP. We need higher taxes. And we need to reform the tax code to make it more efficient so that the higher taxes are economically viable. Given continued economic growth, future Americans will enjoy both more public services and more private consumption than current Americans.


Francois' response: First, reforming health care to cut costs is a dream. There are no cost-cutting measures in HR3200, and none are likely to survive. IMAC is the only way to cut costs and that's not going to pass in a million years now that the elderly know about it, even if they think it's a "death panel".

Second, while I'm all in favor of cutting defense spending, probably even more sharply than Matt, I would be appalled at the idea of cutting defense spending while leaving domestic spending alone. Defense spending is the one thing that citizens can never do for themselves. It's also the one thing that all the other programs depend upon, because without our independence and security, we can't have things like Head Start and food stamps. Ask Leon Blum about all the good social programs do when your country is occupied.

Third, higher taxes? Seriously? We're overtaxed as it is. Matt himself has admitted that you can't just tax the rich and get serious revenues. But the reason middle class tax increases are a political problem is because middle class people can't pay anymore than they do now.

Give up the dream, folks. If the state has a real budget crisis like California, the progressive project is over, finis, done, toast. We'll be electing a string of Calvin Coolidges and Grover Clevelands for the next century if that happens. "Economy" will be the end-all and be-all again.

In 1933, FDR saved capitalism from itself. In 2012, a Republican President may very well have to save progressivism from itself. Progressives are going to have to learn about a little thing called prioritization. Do you want people to be able to retire at 65? Do you want people to have generous health care coverage? Do you want kids to get a good education? Do you want poor people to have decent lives? Not all of those are possible right now. Maybe in the future, but not now. Pick 2 or 3 of those. If you try to do them all with $3 trillion in possible revenue, you'll bankrupt us all. Then where will your "social justice" be?