Wednesday, May 12, 2010

The Most Predictable Debt Crisis You Could Ask For


Demonstrating epic econo-wonk convergence, both Steve Pearlstein and David Leonhardt have columns today comparing America's fiscal condition to Greece's, and arguing for a cocktail of tax increases and spending cuts to balance the books.

The main thing to say about our yawning long-term deficit -- which is distinct from our necessary, manageable and stimulative short-term deficit -- is that this is about the most predictable debt crisis you can ask for. No one will be able to say they didn't see it coming.

Nor will they be able to say we didn't know how to solve it: The main question is how to get health-care spending under control. And both Pearlstein and Leonhardt offer solutions that would get us closer.
As Ezra points out, their suggestions amount to -- in a nutshell -- "pass the Affordable Health Care Act."

Which we already did.

Talk like this goes a long way to framing a more rational narrative around deficit reduction.  Instead of across the board spending cuts and program defunding -- something CAP has done a great job of laying out the reality of what such bottom line cuts would entail -- there is a swell in solution pondering more centered around creatively addressing long term costs and expenses that I'd argue are the only real long term solution, barring "going Galt" with the tea partiers or passing a balanced budget amendment.  Which is, of course, insanely stupid.

It's really just a matter of planning and embracing change rather than a reactionary "bottom line this year" approach.  Spending cuts aren't the only solution.  They're just the only thing Republicans want to talk about.

And, yeah, there's a lesson federal legislators could take from the Utah Legislature.  Utah responded to a budget problem with massive cuts and a lot of (A LOT OF!) federal money.  At the federal level, there's no broader governing body to get a stimulus check from, and several concerns Utah is free of (miliatry, FDA, airport security... poor people).  Strict spending cuts and balanced budget amendments are fodder for conservative strong holds like Utah, but at the federal level, a more nuanced, responsible, and forward thinking solution is going to be required.

Health care reform was a great start.

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