Here is my Sunday column...
It appears that liberals across this nation are slowly
sinking into political psychosis as they rally around the idea that the
fiscal cliff is a myth, a scam.
Beyond those Democrats in Congress
who recklessly propose letting the country go over the cliff, we now
have left-wingers in the blogosphere claiming that there’s nothing to
fear — this crisis is manufactured by rich bankers on Wall Street.
The
conspiracy theory is this: The millionaire CEOs want to protect their
low tax rates by chopping the federal government down to a size not seen
since the days of Ozzie and Harriet.
These true believers
conveniently ignore CBO projections that indicate taking no action on
spending and taxes before Jan. 1 would sink the nation into a new
recession. In addition, middle class families would bear an average tax
hike of $2,000 to $3,000, while also losing the $800 to $1,000 annual
payroll tax cut.
Beyond that, the cliff-deniers seem incapable of
accepting the long-term budget projections. Or the fact that Medicare
costs are slowly spinning out of control. Or that the retiring Baby
Boomers and longer life expectancy have made the current path of Social
Security unsustainable in the long run.
Maybe those left-wingers
who feel betrayed by President Obama’s modest fiscal plan simply cannot
grasp this: For every $100 the federal government spends, $40 of that
amount is borrowed money. Of course, it’s absurd to talk in terms of
$100 increments. The feds spend roughly $400 million a minute. Yes, per
minute.
While Congress and the White House negotiate whether to
set the threshold for the top tax rate at $250,000 or $400,000 or $1
million, the true enormity of the spending cuts that are needed remains
largely under the radar.
Those Democrats who want substantial
Pentagon reductions but demand that entitlement programs remain
bullet-proof ignore one imposing prognosis. In addition to our annual
budget deficits, the long range financial difficulties of Social
Security, Medicare, Medicaid and federal pensions have implanted on our
horizon a fiscal abyss, not a fiscal cliff.
David Walker, the
former U.S. comptroller — the federal government’s chief accountant —
has warned that the nation is “underwater to the tune of $50 trillion”
in long-term obligations.
Strident liberals and conservatives
alike seem incapable of admitting that the broader fiscal problem is
that most American taxpayers want it both ways. Low taxes and big
spending programs — that’s the incongruous demand of the electorate, as
demonstrated by polls that show solid opposition to all the painful
fiscal fixes that are on the drawing board. Grassroots Democrats and
Republicans denounce any attempt to cut their respective favorite
programs, but they also don’t want their taxes touched.
There’s
also this dose of reality for lefties: We will never have a Congress
that is willing to make big cuts in defense without touching social
programs.
The figures that matter most — spending and revenues as a
percentage of GDP — show that we are historically low in revenues and
high in spending. The logical course favored by pragmatic lawmakers is
to reshape both sides of the ledger and meet in the middle.
If
liberals will not acknowledge the “free lunch” mentality among
taxpayers, they should at least take a different path than denial: work
to elect a Congress that is willing to make the American people pay the
bill — all $3.7 trillion of it — on an annual basis.
I suspect one
disconnect among the young, ultraliberal hipsters is that they cannot
appreciate the enormity of a $1 trillion budget deficit. They know
nothing of the panic during the Reagan years when the deficit hit $300
billion, and they throw out references to the Bush presidency without
grasping how much the spending-taxing gap has widened under President
Obama.
Meanwhile, Obama wasted precious weeks after the election
by going on a campaign-style tour of the country rather than privately
convincing congressional Democrats that a broad mix of spending cuts and
tax and entitlement reforms, similar to those in the Simpson-Bowles
plan, is unavoidable.
As former president Bill Clinton said at the
Democratic convention, this is all about arithmetic. At the time,
liberal political groups cheered that line. Now they demand that Obama
keep entitlements off the ledger. That makes the math pretty convoluted.
Timid
Democrats who often refer to the “good old days” of the Clinton economy
and Clinton tax rates no longer mention those higher rates — except in
connection with the top 2 percent of earners. They also don’t address
this question: If the Clinton years were so successful, why not return
to that era’s spending levels? Why not? Because liberals know that
spending as a percent of GDP would drop significantly.
It’s much
easier to insist that no action is needed. Or to ignore the fact that
this crisis was created by a weak, indecisive Congress.
Liberal blogger James Galbraith offers this breathtakingly jaundiced point of view:
“Stripped
to essentials, the fiscal cliff is a device constructed to force a
rollback of Social Security, Medicare and Medicaid as the price of
avoiding tax increases and disruptive cuts in federal civilian programs
and in the military. It is policy-making by hostage-taking, timed for
the lame-duck session, a contrived crisis. The plain idea now unfolding
was to force a stampede.
“In the nature of stampedes, arguments
become confused. Panic flows from fear, when multiple forces — economic
and political in this instance — all appear to push the same way. It is
therefore useful to … ask whether any of them justify the voices of
doom.
“… Is there a looming crisis of debt or deficits, such that sacrifices in general are necessary? No, there is not.”
Cliff-deniers aren’t as wacky as the birthers on the right, but they’re just as far off the mark.
From the world headquarters in Mount Clemens, Senior NOTHING Correspondent Chad Selweski, reporting something.
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