So now that the election is done at last, we can get down to the hard work of striking a “grand bargain” on the budget by cutting spending and raising taxes, and thus avoid the looming “fiscal cliff.”
Any bargain will be a bad bargain, of course. Not so long ago, any moderately bright schoolchild could have told you that you never slash spending or raise taxes when the economy is still slowly emerging from a steep recession. As if the object lesson of the 1930s isn’t enough, we have the ongoing suicide of the European Union to confirm that “austerity” is just one more misguided attempt to apply the same rules that might work for a middle-class household to the course of nations.
It’s not working there, and it won’t work here.
But until Europe collapses completely, China’s slowing economy grinds to a complete halt, and all the “fiscal cliff” metaphors are inevitably replaced by unremitting references to “a perfect economic storm,” our nation’s leaders are bound and determined to continue with this madness. Since the campaign is finally over and our leaders are now reverting to habit—completely ignoring what the rest of us want—all we can offer is this feeble challenge:
The next media pundit who calls for shared sacrifice must describe in detail just what he or she is prepared to give up.
And it has to be a real sacrifice.
The idea that Thomas Friedman might see his federal tax rate go up a few percentage points does not equate with a sanitation worker or Walmart clerk having to clock in for another four years before they can claim Social Security. David Brooks, say, losing a favorite deduction isn’t the same as a retired waitress in her 80s seeing her Medicare slashed.
Right now, “shared sacrifice” means that many wealthy, powerful people share the opinion that the rest of us should sacrifice.
Mr. Friedman, for instance, calls every few minutes or so for President Obama to “endorse the Bowles-Simpson plan” for closing the budget gap. In fact, it’s a stretch to say that any such “plan” even exists. The Bowles-Simpson committee that Mr. Obama set up never actually managed to reach an agreement. Instead, the two committee chairmen, former Clinton chief of staff Erskine Bowles, a North Carolina Democrat, and former Republican senator and professional loose-cannon Alan Simpson of Wyoming came up with a plan between them that they trumpeted—with the help of a fawning media—as a great, bipartisan accomplishment.
It is, instead, a prescription for hunting down every last remaining vestige of the middle class in this country and beating it to death with a stick.
Under the Bowles-Simpson plan to reduce the deficit, the top federal income tax rate would be dropped to 24 percent, the top corporate rate would be cut from 35 percent to 26 percent, and almost all deductions would be eliminated, including those for home mortgage interest, and employer health-care plans. Meanwhile, military pensions, student loan subsidies, Medicare and Social Security would be slashed, while other revenue would come from new, regressive levies such as a 15 percent increase on gas taxes. By the way, if the notion of putting a crazy old, obnoxious right-wing coot and Bill Clinton’s chief fund-raiser at Morgan Stanley in charge of a committee to make the very richest people in America still infinitely richer while at the same time ripping open the underbellies of working people in this country from stem to stern seems like a puzzling idea coming from the great avatar of hope and change, you’re onto something.
It’s another of the truly idiotic notions President Obama misguidedly backed on the advice of all those old Clinton economic advisers he ran against in 2008—and promptly hired back in 2009. It’s likely to work out as well as their other determinations, such as the prediction that unemployment would drop so fast we didn’t need to go any bigger on the stimulus, and that the housing market would turn around in no time.
The idea that we must “reform” entitlements derives partlyfrom the observation that many people are living longer nowadays. That’s true enough overall, but not for most men and women toiling in blue-collar professions, who will be forced to work even longer at jobs that exact a terrible physical toll. For that matter, the extra time for all of us comes at the end of life, which we’re more and more likely to spend in an oxygen tent or a state of dementia.
What’s more, forcing people to work more years, especially amid a dismal labor market, is like squeezing a tube of toothpaste in the middle, and squeezing it hard. It means either that many more people just out of college won’t be able to get jobs right away, or—even worse—that many more people will be laid off in their mid-60s, and forced to somehow scramble to keep hearth and home together until they can qualify for their (much-reduced) Social Security and Medicare.
Besides being appallingly cruel to working people, and destructive to the general economy, what’s wrong with this scenario? Oh, yeah: it will endanger everyone. You really want that fireman with the double knee replacement coming to save you from the flames? How ’bout hitching a ride with that bus driver with the cataracts and the heart condition?
The grand bargain is in fact a grand and arbitrary cancellation of the social covenant that’s brought this country unprecedented prosperity and social justice over the last 80 years, and it’s being pressed by a small coterie of wealthy, overwhelmingly white men who will themselves contribute about the equivalent of a working person’s laundry money for the week.
No one voted for it, and not even most political activists understand fully what it means or how likely it is to pass. An informal survey I took of a dozen, random delegates at the Democratic convention found that not a one of them thought this was or should be a priority for a second Obama term—it’s just not on their radar. (As for Republican die-hards, they didn’t plan on this either—instead, it’s safe to say, most heard whatever Mitt Romney was espousing at any given time as simply, “I will take away stuff welfare mothers in New York are getting and don’t deserve.”)
Are there better ways—once the recession is fully in the rearview mirror—to eventually balance the budget? Sure, and I’ll get to some of them in the weeks ahead.
But first, I’d love to hear the specifics from all the Grand Bargainers: just what do you intend to sacrifice?
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