March 17, 2005

Budget Armageddon

It's an arcane subject, I know, but everyone should go read Max Sawicky's new paper on what the Bush budget means for our future. Too good to summarize. The headline-grabbing bit is that budget choices today are putting Social Security and Medicare benefits for all workers, including those over 55, in grave danger. Very true. The paper's most important point, though, is that "excessive deficit spending over the next 10 years" is our biggest long-term problem (apart from rising health care costs), and it's the main reason why our debt-to-GDP ratio is set to explode over the next half-century, making the whole boondoggle oh-so unsustainable. Best advice: Don't have kids. They'll only suffer needlessly.

UPDATE: How nice. I see Republicans have shot down new "pay-as-you-go" rules in the Senate today. Heh. Indeed.

UPDATE II: By the way, good liberals, let's not delude ourselves. The much fawned-over tax reform plan from the Center for American Progress is cute, but not nearly enough. The CAP goodie bag would bring in 17.2 percent of GDP in annual revenues by 2015, by their own estimates. But outlays plus net interest in 2015 will still be 19.4 percent. In fact, the CAP plan would leave a bigger deficit that year than the one under Max's scenario, in which net interest keeps compounding on, debt grows faster than GDP, and we have a debt-ratio of 240 percent in 70 years. Armageddon! So good work on yanking the budget away from Bush's spinning chainsaw, but it doesn't staunch the bleeding, much less heal anything.

UPDATE III: Hm, Matt Yglesias says I'm wrong and the point of the CAP plan is to discuss what type of tax reform the country should have before we discuss actual levels of taxation. Very clever argument, but I'm not sure the two debates can be so cleanly separated. I like the CAP plan a lot, and I think it presents a smart vision for progressive taxation, and I would love to have a debate over the structure of tax reform. But... much of the CAP plan's glossy appeal comes from the fact that it a) keeps the higest marginal rate at Clinton-era levels, and b) cuts taxes for people making under $120,000. In short, that it's *relatively* painless. And yet it would be impossible to maintain both of those cool features, and bring the deficit under control, and cover the uninsured (barring an overhaul in health care, figure that will cost $100 billion a year, no matter how we do it). I mean, whatever. If proposing cookies for everyone is the way to win the tax debate, I'll go along, but still.
-- Brad Plumer 3:42 AM || ||