Making the federal government’s budget more sustainable has been a theme in politics for the last thirty years, at least, but it has reached the point now where the government is deadlocked on how to go about it. Doug Elmendorf, as director of the Congressional Budget Office, has had a great deal of experience trying to explain to Congress the facts about how the federal budget works, and has had little luck in getting them to accept what would be necessary to actually balance the government’s books. In his words, “[t]he country faces a fundamental disconnect between the services the people expect the government to provide, particularly the benefits for older Americans, and the tax revenues that people are willing to send to the government to finance those services.” [Wessel, p. 158]
Right-wing politicians are of the firm philosophical view that taxes are evil and must be avoided at all costs, but aren’t willing to pay the political price which they’d incur if they were to cut entitlements and other government programs by enough to make up for the lack of revenue. Those on the left, on the other hand, believe that entitlements are sacrosanct (and should probably be enlarged), but aren’t willing to risk the political cost of raising enough taxes to pay for what they think government should do. Thus, both sides have made an art form of making vague speeches about how they would reduce the deficit, trying to score political points off of each other, all the while managing to ignore the experts who have pointed out the necessity of both increasing taxes and reducing entitlements and government spending in general.
Solving this deadlock without wrecking the other parts of the Interlock is one of the thornier dilemmas within our current set of problems, but if the federal government loses its ability to borrow money at low rates – which it will if we don’t fix our fiscal habits – any hope of fixing the rest of our problems in the next few decades goes up in smoke.
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