The president and congressional leaders came to some sort of an agreement last night. It sounded a tad vague to me. Apparently, politicians still fear taking pride in identifying actual cuts.
Harvard economist Jeffrey Miron, writing last week, argues that the deals then on the table amounted to “fiddling while Rome burned.”
The only thing surprising about the above sentence, to savvy readers, might be the suggestion that “Harvard economist” is not a contradiction in terms. But hey: Judge for yourself.
“The problem with the Democratic position is that it regards redistribution, rather than economic productivity, as the prime goal of government policy,” Miron reasonably asserts. The problem with the Republicans? A “refusal to distinguish between the tax revenue that comes from higher rates and that which comes from fixing tax loopholes that inappropriately privilege certain consumption or production.”
Higher tax rates won’t work, because “the available revenue from the wealthy is far too small. And higher taxes discourage economic growth, making deficits worse.”
But Obama’s idea of closing some loopholes is not a horrible idea, Miron argues. These so-called loopholes are bad policy to begin with, integral, as they are, to bipartisan folly, favoring some folk at the expense of the rest. Picking winners — what some tart up as “industrial policy,” but most of us identify as “buying votes.”
Miron says that Medicare, though, is the biggest ongoing fiscal destabilizer. Cuts must be made there.
Those will likely be the hardest to secure.
This is Common SEnse. I’m Paul Jacob.
6 replies on “Fiddling in the Flames?”
Paul, Ive read your columns for years, and I like most of them, including the one upon which I now comment.
I am 81.5 years old. I’ve had less hassle from eitherSocial Security or Medicare when properly administered than my private “health” insurance. The Medicare fraud that is bruited I have found to be of private medicos and drug and/or med equipment companies.
It is unnecessary to threaten private citizens’ retirement cash and their health service scurity. The first items to slash are our country’s immense horribly misused military, our constant wars, its incessant adventurism abroad, and its touted “War on Drugs”. Our prisons waste the lives and energies of several times the number of people who ought to be in them. And our overall waste of material resources, our garbage creation, our abuse of the commons is almost unbelievable. Taking adequate (and nonauthoritarian) care of these matters would save enough money to pay of our nation’s debts without burdening our descendents with new ones.
Donald for president!
Never been a case in the history of the world where a country has been as deeply in debt, GNP versus what is owed, and not defaulted. Question is do we do it now while the pain might be manageable, or do we kick the can down the road to where the results are catastrophic?
Rarely do we get a political group in power that is not willing to give the can another kick. My expectations of the current group are probably still too high although I have been ratcheting them downward as fast as I can.
An income tax is not a consumption tax because it taxes savings and capital as well. “Income” is also not the same as weekly wages, except for laborers. “Net income” requires the deduction of outlays to earn the income. Identifying every deduction as a “loophole” that improperly favors some activities is not good analysis.
I HAVE YET TO SEE WHERE ANYONE- EITHER PARTY, OR THE TEA PARTY PEOPEL, FOR THAT MATTER–HAVE DARED SUGGEST THAT THE MSOT SACRED BE CUT.
I AM REFERRING, OF COURSE, TO CONGRESSIONAL SALARIES; PERKS; OVERLY LARGE STAFFS; FREE TRAVEL (WITH THEIR SPOUSES AND FAMILIES)- EVEN WHEN LEAVING OFFICE; MEDICAL CARE -EVEN AFTER LEAVING OFFICE; PENSIONS–OVERLY LARGE TO BEGIN WITH- EVEN WHEN LEAVING OFFICE IN DISGRACE (AS WITH SEVERAL RECENT RESIGNATIONS, AND ONE- SOME YEARS AGO- WHEN THE CONGRESMAN- DAN ROWENSKI-I BELIEVE- D-ILL, WENT TO PRISON.
AND THE EXECUTIVE STAFF, WHICH AHS ALSO GROWN EXPONENTIALLY, IN THE LAST DECADE OR TWO.
Harvard economist is indeed an oxymoron, and this character is no different. Certainly closing loopholes would be fine with the majority of voters, the problem is that Obama will close some loopholes that do not impact his followers, or himself. It is my understanding that Obama, now a millionaire from bad books, used those loopholes to pay an effective tax rate of 26% rather than his desired (for everyone else) 35%. This “do as I say and not as I do” government will never again be trusted, nor should it.
God, I feel like I soulhd be takin notes! Great work