The Trouble with Taxes and Cuts

Bartlett and Bainbridge go at it over the federal defict and how it will inevitably impact defense spending or lead to a tax hike of some sort.   I think both make excellent points to one another, from two similar but different ideological positions .   Here are the two key points.

Bartlett:

Republicans primarily concerned about national security ought to be in the forefront of efforts to raise revenues to reduce deficits, free up domestic saving for domestic investment, and reduce the importation of foreign saving and the trade deficit. But so far they are not. They remain loyal to the Republican obsession with tax cuts and a refusal to raise taxes in any way for any reason. However, I think my national security-minded friends are soon going to discover that massive defense budget cuts will necessarily be a big part of the price that will be paid for not raising revenues.

Bainbridge:

Given a choice between spending $100 billion on defense [or] shoring up public sector union pension funds, what does Bartlett think his Democratic buddies would do? Given a choice between spending $100 billion on the troops and $100 billion on an unnecessary war of choice, what does Bartlett think the neoconservatives would do?

It's sort of like the old joke about an economist stranded on a desert island, whose punch line "assume a can opener." Bartlett's critique of his old friends would have a lot more traction if he could explain why we should assume a sudden outbreak of good government.

Until I see proof the beast has reformed, I say starve the [expletive deleted].

Can't realy argue with Bainbridge there.  New boss, same as old boss.   Personally I prefer any heavy spending be done domestically and not on American Imperialism ventures.  That aside, something needs to be done about the deficit.   Bainbridge does well to wrap up after a short back-and-forth with Bartlett and gets more to the heart of the matter:

To be clear, however, my point is not that deficit reduction and other sensible budgetary policies can be achieved only through cutting spending. (Just as Bartlett presumably thinks we need spending cuts as well as tax increases.)

On a bipartisan basis, our rulers have spent us into a position in which taxes probably will have to go up at least for a while. But agreeing to tax increases ought to be done only in return for a package of fundamental reforms. We need entitlement reforms (including raising the retirement age), budgetary reforms (bans on ear marks, a line item veto, and a balanced budget amendment), political reforms (real restrictions on gerrymandering), and the like. Letting the powers that be have higher taxes without those other reforms will not solve the problem. All it does is make for a bigger candy store to which we've given the keys to the children.

Put simply, absent real reforms, I don't want anybody in Washington or Sacramento getting their grubby hands on any more of my money because I don't trust them to spend it wisely. My guess is that a lot of Bartlett's new friends on the left, for example, would be quite content to raise taxes and massively cut defense. So the either/or he presents strikes me as a false choice.

Unfortunately, I'm afraid we probably need to wait until things get bad enough that politicians on all sides will be forced to agree to fundamental reforms to avoid going the way of Greece.