Monday, February 8, 2010

Big Government's Big Shortfall

From Robert Samuelson via Real Clear Politics:

"In all the recent reports, speeches and news conferences concerning the federal budget outlook -- including the administration's proposed budget for 2011 -- hardly anyone has posed these crucial questions: what should the federal government do and why; and who should pay? We ought to go back to first principles of defining a desirable role for government and abandon the expedient of assuming that anyone receiving a federal benefit is morally entitled to it simply because it's been received before."

"...There's a huge mismatch between Americans' desire for low taxes and high government services."

"...there is no way to close the massive deficits without big cuts in existing government programs or stupendous tax increases. Suppose we decided to cover all future deficits by raising taxes. Taxes would rise in the 2020s by roughly 50 percent from the average 1970-2009 tax burden."

"We can no longer just tinker. We need to ask whether government spending serves genuine public purposes or merely benefits favored constituencies."

"The politics of procrastination is bipartisan and rests on shared assumptions: that the public won't stomach hard choices; that we don't know whether large budget deficits will produce a crisis or when; and that, therefore, the easiest political course is to dawdle and blame the other party. But this self-serving inattention, coupled with much larger deficits, is tempting fate. If investors lose confidence in Treasury bonds, they would demand much higher interest rates. The ensuing crisis would almost certainly compel abrupt spending cuts and tax increases that would make today's choices look gentle" (My emphasis)

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