Wednesday, July 13, 2011

David Leonhardt, writing in the Times...

...today, says what I've been thinking for a while now: Americans expect certain services from their government and need to just grow up and pay for them. (David Stockman came to the same conclusion back in the 1980s in his book, The Triumph of Politics: Why the Reagan Revolution Failed.)

From Leonhardt's piece, "Why Taxes Will Rise In the End" (my emphasis):

Polls show that most Americans are opposed to raising the federal debt ceiling. Even when the Pew Research Center included the consequences in its question — a national default that would damage the economy — slightly more people were against raising the ceiling than were for it.

How could this be? Above all, I think it reflects a desire to return to the good old days. Not so long ago, nobody was talking about tax increases or Medicare cuts, and the federal budget seemed to be in fine shape. If only we could get back to the past — get spending under control, as the cliché goes — we’d be O.K. The debt ceiling, with its harsh finality, offers the chance.

Unfortunately, this nostalgic view depends on a misunderstanding of the budget. It imagines a budget in which the United States indefinitely has the world’s highest medical costs, its largest military, an aging population and, nonetheless, taxes that are among the world’s lowest. Economists have a name for that combination: a free lunch.

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