Attention: Deficit Disorder

[kentuck]

Robert Rubin, head of the Treasury under Clinton, lays out in detail what needs to be done to get our deficits under control and get our economy moving again. Worthwhile read.
========================================================
http://www.nytimes.com/2005/05/13/opinion/12rubin.html

<snip>

Most pressing is the 10-year federal deficit, which most independent analysts project at $4.5 trillion to $5 trillion, assuming that the tax cuts passed in 2001 and 2003 are made permanent and that the alternative minimum tax is adjusted to avoid unintended effects on middle-income taxpayers. And while 10-year numbers can be highly unreliable, deficits are as likely to be higher as to be lower. Over the longer term, Social Security has a 75-year estimated deficit of $4 trillion, while the different components of Medicare, including its new prescription drug benefit, represent a fiscal problem of roughly $20 trillion.

<snip>
The tough decisions needed on both spending and revenues will probably require some process whereby the president and leaders of the Senate and the House of Representatives and both parties assume joint responsibility for painful political choices. Tax revenues are approximately 16.5 percent of gross domestic product, the lowest level since 1960, and spending is roughly 20 percent. We must have serious spending discipline and entitlement reform - though any entitlement reforms likely to be proposed would have little immediate effect.

But, as BusinessWeek, not an advocate of activist government, said in a recent editorial, "the deficit morass is due as much to a revenue shortfall as to excessive spending." (The 2001 and 2003 tax cuts, for example, are estimated to have a 75-year cost of $11 trillion, almost three times the entire Social Security deficit.) And that shortfall is especially pressing given the rapid increases in entitlement costs and the need to finance national security, investments in education and infrastructure and other critical programs. At the same time, revenue-increasing measures must reverse the recent trend of disproportionately favoring upper-income taxpayers.

<snip>
For example, if the tax cuts for those earning above $200,000 were repealed and the inheritance tax as reformed were continued rather than eliminated, the 10-year projected deficit would be reduced by roughly $1.1 trillion, or almost 25 percent, and the 75-year fiscal reduction would be roughly $3.9 trillion, or approximately equal to the Social Security shortfall. This course of action would be similar to the income tax increases that were combined with spending cuts in the 1993 deficit reduction program, which some predicted would lead to recession but which, instead, was followed by the longest economic expansion in our nation's history.

....more

[ElsewheresDaughter]

1. i thought this was gonna be a Thom Hartmann thread

;)

[GOPBasher]

2. This guy is making too much sense.

What he says is totally true. Why the hell is he living in the Republican era?

Didn't he get the memo? We no longer care about the national debt. We can spend as much as we want in Iraq and have all the tax cuts to billionaires as we want. It doesn't matter. The Rapture's coming soon, so it the debt doesn't matter.