If you want to lower the deficit...

David Leonhardt, New York Times columnist and reporter


Kai Ryssdal: President Obama made another plug for his $50 billion infrastructure program today. That's the one that nobody in the White House wants to call an economic stimulus program. Mostly because of the political agita over how much the government ought to be spending to create jobs and what might that do to the budget deficit?

Commentator David Leonhardt says the whole conversation about the deficit needs to change before we're going to get anywhere.

David Leonhardt: Let's face it -- a lot of the talk about the deficit ends up being pretty vague. Politicians want to cut spending, but they don't say which spending. They want fundamental tax reform, but they don't explain how that will bring down the deficit.

So here's a little rule: If you want to be taken seriously when you rail against the deficit, you need to support one of the following four policies. Better yet, support more than one.

Ready for the four? One, cuts to Medicare. Two, cuts to Social Security. Three, military cuts. Four, tax increases. Any budget expert will tell you that we simply cannot fix the deficit without doing at least one of those four.

The Congressional Budget Office projects that by the year 2035, the annual deficit will be almost $2 trillion. Let's imagine that we make big cuts to every government program that's not our list of the big four -- bigger cuts than Ronald Reagan made -- to things like education and transportation. How much money might that save? Only about $100 billion. You can even double that figure and assume truly radical cuts. Even then you have saved a measly 10 percent of the projected deficit in the year 2035.

The reason is that these programs make up only a modest share of government. The three biggest programs -- by far -- are Medicare, Social Security and the military.

But we can do something about those programs. We can clamp down on Medicare spending that hasn't been shown to make people healthier. We can raise the retirement age for Social Security. We can reduce wasteful military spending; though, by itself, that won't be enough. And we can definitely raise taxes. As a share of GDP, taxes are now at their lowest level since 1951.

What we cannot do is just wish the deficit away. We've promised ourselves more government that we've paid for, and that can't continue.

So which of the big four do you choose?

Ryssdal: David Leonhardt writes The Economic Scene column for The New York Times. If you've got ideas for cutting the deficit, give 'em a try on our website. We've got a budgeting game called Budget Hero.

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These comments are unbelievable. Taxing "the rich" is the main response. Who gets to define "rich"? If I work more, I get paid more. But then I am taxed more, so my incentive for working is reduced. You people act as if money grows on trees. Why do you have such a strong dislike for other's hard earned income? Quit finger pointing and pay 70-90% of your income to the legislature. I am sure they would be happy to spend it for you.

Why should the choices all hurt Americans? What about cutting off humanitarian aid and all the other aid we give to other countries at the expense of the taxpayer? Isn't seeing that our citizens get the Medical help they need and the social security to survive as necessary as helping foreign countries?

Isn't Social Security self-funding? For decades the surplus in Social Security taxes over the payout of benefits has been used (illegitimately) to make the real budget deficit to appear smaller—-even to the extent of creating a phantom budget surplus in the late nineties. How is Social Security now part of the deficit problem?

By the way, ALL military spending is a waste. If you don't use what you spent the money on, then it's a waste by definition. If you do use it, then it gets destroyed in the process along with the lives and property of many people. A total and truly sad waste of resources.Better to put more money into education, cultural exchanges, diplomacy, fair trade practices in order to avoid the escalation of misunderstandings and disagreements into armed conflict.

Thirdly, more people working equals more tax revenue.

Please do our children and grandchildren a favor and get rid of the Bush tax cuts, at least for the rich. This should be a no-brainer. Take a drive through any American suburb: you will see mile after mile of 6000-square-foot houses with four cars and a boat in the driveway. Those do not look to me like the homes of people whose taxes are too high.

Finally, somebody talking sense.

I vote for drastically reduced military spending and higher taxes for the upper tax brackets and corporations.

The rich got off paying for their last two wars. During Vietnam and WWI, the Federal tax rate for the top earners was over 70%; during WWII and Korea, it was over 90%. If we returned to sensible rates like those for a few years, we'd probably eliminate our deficit in short order.

A major downside to listening to many hours of radio each day is that I often forget exactly where I hear one story or the other, but it wasn't that long ago (and possibly on Marketplace Radio) a notable economist explained that we could eliminate our entire national spending deficit by simply letting the Bush taxcuts expire.

Over time, the money raised by simply NOT continuing those tax breaks to the people who really own that debt --us, the middle class and the already-too-wealthy -- would completely eliminate the spending deficit.

It's worth noting that such a plan depends on us ending spending on boondoggles such as unnecessarily wars, such as Mark already so astutely pointed out.

Thanks for cutting through the illusions to get to the core issue. But can't we go even deeper? "We can reduce wasteful military spending." What does this mean? What qualifies as "wasteful"? I recently started a blog, Niboration (http://nibor8.wordpress.com/), in an effort to understand why the U.S. needs 700 military bases all around the world--including in Europe (the Cold War is over, after all). I invite folks to visit the blog and share what they know--or think--on whether this is a good investment.

You gave us the big four, but you failed to define one of those four correctly. How about we change option 3 to maximize our savings - stop invading other countries, get out of those we have invaded, including Iraq, Afghanistan, Japan and Germany. Cut the military to be purely defensive, stop pretending we can police the world.


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