From giveaway to takeaway

Economy columnist Robert Samuelson sees our government having to transition from a “giveaway” mode, which dominated over the last half century with politicians doling out benefits and tax breaks, to a “takeaway” mode, in which many of such goodies have to be taken away.  Samuelson says, however, that the politics of doing so are just not possible.

Any resolution of the budget impasse must repudiate, at least partially, the past half-century’s politics. Conservatives look at the required tax increases and say, “No way.” Liberals look at the required benefit cuts and say, “No way.”

Each reverts to scripted evasions. Liberals imply (wrongly) that taxing the rich will solve the long-term budget problem. It won’t. For example, the Forbes 400 richest Americans have a collective wealth of $1.5 trillion. If the government simply confiscated everything they own, and turned them into paupers, it would barely cover the one-time 2011 deficit of $1.3 trillion. Conservatives deplore “spending” in the abstract, ignoring the popularity of much spending, especially Social Security and Medicare.

So the political system is failing. It’s stuck in the past. It can’t make desirable choices about the future. It can’t resolve deep conflicts.

An alternative theory is that we’re muddling our way to a messy consensus. All the studies and failed negotiations lay the groundwork for ultimate accommodation. Perhaps. But it’s just as likely that this year’s partisan scapegoating implies more partisan scapegoating. Political leaders assume that financial markets won’t ever choke on U.S. debt and force higher interest rates, stiff spending cuts and tax increases.

At best, this is wishful thinking. At worst, it’s playing Russian roulette with the country’s future.

via A country in denial about its fiscal future – The Washington Post.