Debt Lies and the Lying Debt Liars Who Tell Them

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In Washington, D.C., there is a distinct thrill in announcing that you've identified a crisis in need of some solving. But that coming up with a solution part ... not so thrilling, it turns out! Example: We have a serious long-term debt crisis. Everybody agrees. But there's no political gain in being the first person to offer painfully granular ideas about tax increases and Medicare cuts. The political gain for senators is in whining to the Washington Post that nobody is "serious" about an issue whose seriousness they happen to be virtuosic at describing:


"We can't let the government continue to run deficits of this magnitude," said Sen. Evan Bayh (Ind.), the only Democrat to vote last month against a short-term increase in the debt limit. "What I'm going to look for is real, credible, enforceable fiscal restraint."

That's rich stuff. Evan Bayh is a famous supporter of killing the estate tax, which would increase the deficit by $250 billion over 10 years. For every tomorrow, he'll to profess concern about the deficit. But so long as it's "today", he'll demonstrate concern for keeping the support of rich Indianans. He's "going to look for" serious deficit-busting ideas the way DC Yellow Cab is going to look for the coat button I lost last week somewhere around Dupont.

Instead of having a debate about the deficit, we're having a debate about how to have a debate about the deficit. The White House wants to select its own panel to brainstorm ideas. Some senators think that idea is a "fraud" and want to select the panelists themselves. It doesn't matter who selects the panelists because if they produce good, difficult ideas, nobody will vote for them in an election year. If they produce bad, easy solutions, they won't make a dent in our long-term deficit.

The politicians are bad enough, but sometimes the media buys into their colorful displays of anguish about the deficit in ways that are equally annoying. Here's the Washington Post on the Republicans' aversion to a White House-selected deficit reduction panel:

A stronger approach backed by Sen. Judd Gregg, R-N.H., would require Congress to pass legislation setting up the commission and require a vote on deficit-cutting recommendations if at least 14 panel members could agreed on a plan. But there isn't enough support in the House or Senate to pass this version of a commission, given opposition from the right and left.

Sen. Judd Gregg's "stronger" approach to reducing the deficit requires super-majorities to pass a Congress where even simple majorities are scarce -- it is designed to fail. It's the "stronger" approach to debt reduction the same way investing in time travel or particle teleportation would be the "stronger" solution to traffic congestion.

One can identify at least three driving factors of our long-term debt crisis. First, there is already a deep disconnect between the services Americans expect to receive and they taxes they support paying. Second, the recession will retard GDP growth for the next few years at least, which will hurt government revenue even as it pressures the government to spend more to counter joblessness. Third in the next ten years as the baby boomers retire, entitlement spending on Social Security and Medicare, especially, will explode.

Each of those driving causes is politically intractable. We aren't paying for our services, but Republicans and some Democrats won't vote for higher taxes. The recession is expensive, but unemployment will still be extremely high next year. Entitlements are set to explode in a decade, but both sides treat senior benefits with the skittish sensitivity of a third-degree sunburn.

In the next nine months until election day, an elected's willingness to bemoan the national debt will be considered a critical measure of his or her seriousness. But debt talk is so cheap, and reelection so expensive, that it's probably best to think of the Senate's trust deficit as an structural entitlement rather than a fresh crisis.

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Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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