Paul Krugman says that the emphasis on tax cuts and starving the beast is not producing the intended result of reducing spending. Hes right about that. Tax cuts are important, but they are only half of the equation. We really need to emphasize this more; because as valuable and useful as tax cuts are to stimulating the economy, there cannot be fiscal responsibility without reducing spending. This is a hard truth to accept for most politicians. It would be hard to find any of them who are willing to make tough choices about what programs need to be cut. The easier choice is to support tax credits or cuts, than to say look, we are spending too much money and wasting the majority of the money being spent. This is what must be done if our country is to be saved from the impending financial doom. The time is now to fix whats broken.
Reforming the system will not be an easy task. Government programs will always be ineffective and wasteful. If those programs actually solved problems, the need for them would go away completely or it would be greatly diminished. Government jobs depend on the existence of these programs, and the employees will fight like mad to keep their comfortable existence on the federal payroll.
Look to Greece for an outstanding example of this. Who is protesting the government over there over their fiscal chaos? It is government workers, upset about their potential loss of benefits and the entitlements granted to them by the beneficent socialists in their bureaucracy. Once government dependents are created, Pandora has already escaped from the box, and theres no return to normalcy after that. While Paul Krugman may be correct that the U.S. is not Greece, I would argue that he underestimates the potential for a similar financial disaster. As the cliché goes, the first step is to admit theres a problem and the U.S. has a spending problem. It has a debt problem. We have had massive debt and spending under both Republican and Democrat administrations. It is way past time for both parties to seriously address these problems.
May I remind my colleagues on the left that deathbed conversions are still conversions? Republicans know that the idea of reducing spending and reducing taxes is politically popular, so naturally they want to let voters know that they support both of those things. But its hard to take any politician seriously on reducing spending who cant point to specific programs or services that they want to cut. In addition, no politician running for re-election will tell you that Social Security and Medicare are in desperate need of reform. There is a huge bloc of seniors who vote, and want nothing to do with any future reform of these entitlements. But it must be done and we need to start this process now.
The federal government is broke. It has no money for all these new and exciting programs that the Obama administration has introduced. Since we are the big bad USA, we dont force ourselves to make (or pretend to make, in the case of Greece) tough spending cuts or insist on tax hikes to pay for all this new spending. Dont misunderstand my position here. I strongly oppose tax hikes, especially in this economy, because in the absence of any necessary fiscal discipline, this will only increase the pool of money available to create a bigger, badder, welfare state. Krugman accuses those of us trying to warn the rest of America that we could end up like Greece as wanting to dismantle the welfare state. Guilty as charged, Mr. Krugman. Its the most compassionate thing to do for my fellow Americans — force them to take responsibility for their own lives. Some may fail spectacularly, and some may succeed, and its not the governments job to equalize those outcomes.
We Are Not Greece– Paul Krugman
Facing the Facts: We Are Out of Money, Matt Welch, Reason