TEXT OF COMMENTARY
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.
Marketplace is on a mission.
We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.
Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?