There are three things you need to know about the current budget debate. First, it’s essentially fraudulent. Second, most people posing as deficit hawks are faking it. Third, while President Obama hasn’t fully avoided the fraudulence, he’s less bad than his opponents — and he deserves much more credit for fiscal responsibility than he’s getting.There's more, go read the whole article.
About the fraudulence: Last month, Howard Gleckman of the Tax Policy Center described the president as the “anti-Willie Sutton,” after the holdup artist who reputedly said he robbed banks because that’s where the money is. Indeed, Mr. Obama has lately been going where the money isn’t, making a big deal out of a freeze on nonsecurity discretionary spending, which accounts for only 12 percent of the budget.
But that’s what everyone does. House Republicans talk big about spending cuts — but focus solely on that same small budget sliver.
And by proposing sharp spending cuts right away, Republicans aren’t just going where the money isn’t, they’re also going when the money isn’t. Slashing spending while the economy is still deeply depressed is a recipe for slower economic growth, which means lower tax receipts — so any deficit reduction from G.O.P. cuts would be at least partly offset by lower revenue.
The whole budget debate, then, is a sham. House Republicans, in particular, are literally stealing food from the mouths of babes — nutritional aid to pregnant women and very young children is one of the items on their cutting block — so they can pose, falsely, as deficit hawks.
What would a serious approach to our fiscal problems involve? I can summarize it in seven words: health care, health care, health care, revenue.
But even Krugman isn't being honest. It isn't just "health care". The US is in a hole with deficits because they have cut taxes while kept spending up. Remember the Bush administration? They did two instances of tax cuts arguing that it would "unleash the forces of entrepreneurship" and would generate more tax revenue than was lost in the cuts. Well, it didn't happen. Instead, those tax cuts turned the budget surpluses of Clinton into the Bush deficits. You fix the problem by getting rid of the Bush tax cuts (mainly for the rich) and restore tax rates to where they were under Clinton. And if you really want to be serious, you restore them to what they were under Eisenhower.
OK... I'm a little hard on Krugman, he does talk about raising taxes, but only by slipping it in as the seventh word under cover of a neutral word when he says:
What would a serious approach to our fiscal problems involve? I can summarize it in seven words: health care, health care, health care, revenue.Far down in his article he finally gets real about what is needed:
This brings me to the seventh word of my summary of the real fiscal issues: if you’re serious about the deficit, you should be willing to consider closing at least part of this gap with higher taxes. True, higher taxes aren’t popular, but neither are cuts in government programs. So we should add to the roster of fundamentally unserious people anyone who talks about the deficit — as most of our prominent deficit scolds do — - as if it were purely a spending issue.So why is Krugman also playing cute and downplaying "taxes"? I think he has drunk the Kool-Aid and is allergic to the word "taxes". He certainly doesn't mention that Americans are under-taxed. He doesn't remind his reader that this deficit/debt problem came from the Bush tax cuts sold as a snake oil that would "boost the economy" which it didn't because it mostly went to the ultra-rich. Americans have to get real and be honest about their fiscal situation. They have deficits because they are under-taxed. And the real culprits are the ultra-rich who in the 1950s were paying their fair share but have weaseled out from under progressive taxation and are exceedingly lightly taxed. From Wikipedia: