Somebody Else Solve This Deficit Crisis Right Now!


In Washington, today is always the day to cut taxes, and tomorrow is always the day to have a meeting about reducing the deficit.

Democratic Rep. Harold Ford has an op-ed in the NYT that calls on Democrats to focus on tax cuts and deficit reduction to grow the economy. The Atlantic Wire samples some liberal commentators who rightly skewer the piece for blithely moving from "More deficit-growing tax cuts!" to "Less deficit-growing!" in four paragraphs, without even pretending to acknowledge the discrepancy. Here are the relevant paragraphs:

First, cut taxes for businesses -- big and small -- and find innovative ways to get Americans back to work. We can start by giving any companies that are less than five years old an exemption from payroll taxes for six months; extending the current capital gains and dividend tax rates through 2012; giving permanent tax credits for businesses that invest in research and development; and reducing the top corporate tax rate to 25 percent from 35 percent...

Second, we should pass a more focused health reform bill that restructures current health care costs before spending more, prohibits insurance companies from denying coverage for pre-existing conditions, enacts responsible reform on malpractice suits and extends health coverage to all children...

Third, we should reform our immigration policy to ensure that those who contribute to our economy, especially foreign math and science graduates of American universities, have a clear path to citizenship.

Finally, we need to address budget deficits now rather than waiting for some ideal future economic situation. It's a good sign that the Obama administration is following the advice of Senators Kent Conrad of North Dakota, Evan Bayh of Indiana and other Democratic fiscal pragmatists who embrace the idea of a bipartisan commission to recommend spending cuts to rein in deficit growth. But we must be sure that the administration and Congress heed the commission's advice.

My problem with these paragraphs is not that I think they're terribly misguided on the merits. I agree that targeted tax cuts could boost employment, which would boost production. I agree that overlooking immigration reform this year would be a terrible mistake, for precisely the reason Ford provides -- clearing the citizenship path for foreign graduates of American universities. I do agree that we should pass health care reform, although I don't think Ford's stripped-down version is practical.

But here's my problem: Ford has ideas for tax cuts, health care and immigration. But for deficit reduction, his idea is "Hey, let's hear from somebody else!" This sort of vicarious indignation about the deficit is widespread -- look at Conrad, and Bayh and Gregg. The entire deficit reduction debate is like a group of high school kids who want to create a swanky sounding student group (International Affairs Inter-Student Ideas Engagement Council!) in their senior year so they can list it on their college resumes. We have a deficit crisis because the things causing the deficit like tax levels and entitlement spending are politically intractable. A commission won't solve that problem. It will only rediscover it.

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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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