Oh Lord, Balance the US Deficit, but not Yet? (Apologies to St. Augustine)

There is an excellent piece in today’s New York Times that cuts past the rhetoric to point out that in the main US business has no interest in fixing the deficit. Instead it want to reduce taxes, especially on corporations and the wealthy and is loath to cut spending on anything that affects business. See

http://www.nytimes.com/2011/07/06/business/economy/06leonhardt.html?scp=1&sq=business%20and%20the%20deficit&st=cse

So next time you hear a Tea Party or other person of any political persuasion talking about the deficit, ask for the numbers in their proposal to cut it. By the way, when Pew Polling had people from across the political spectrum choose from a range of a tax and spend options to end the deficit, supporters of the Tea Party did worst in finding a combo they could support, and which also fixed the deficit, primarily because they couldn’t accept any tax increase. Anyone who thinks you can fix the deficit without raising taxes is on something.

Here are some numbers on the effect of various actions on the deficit, which is projected to reach $1 trillion or $1,000,000,000,000 who like to see all the zeros per year. All of these have been suggested and costed/estimated fairly rigorously:

  • Take $100 billion out of the defense budget as Iraq and Afghan wars wind down
  • End many farm subsidies $15 billion
  • Cut Federal workforce by 10% $15 billion
  • End Bush era tax cuts for those earning over $250,000 $60 billion
  • End other Bush era tax cuts for everyone else $200 billion
That totals nearly $300 billion: still another $700 billion to go to offset a $ trillion deficit and so you have to look hard at social security (raising the age it starts), Medicare (reduce costs, increase contributions) and other deeply unpopular measures. This is hard so the fundamental message of this posting is: beware of those promising easy solutions (cut government) as the devil is in the detail and the numbers. And remember, given some the alarmist comment, the Deficit caused by the Second World War dwarfs what we have today and the US had no problem bouncing back post-war from that. The fact that it was caused by a war is irrelevant in some ways. It is possible to bounce back. You have to have the common sense and wisdom to choose an appropriate, realistic approach that could garner some national consensus and not an ideologically blind strategy. Funnily enough the electorate have exactly such an approach in mind; it is just ideology and special interests who game play and make it so difficult.

About creativeconflictwisdom

I spent 32 years in a Fortune Five company working on conflict: organizational, labor relations and senior management. I have consulted in a dozen different business sectors and the US Military. I work with a local environmental non profit. I have written a book on the neuroscience of conflict, and its implications for conflict handling called Creative Conflict Wisdom (forthcoming).
This entry was posted in Conflict Processes, Economic Conflict, Ways to handle conflict. Bookmark the permalink.

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