November 11, 2010

First thoughts on the Deficit Commission report

Not my thoughts, I haven't had a chance to read the report yet, but I will.  Rather, here's some responses that you might find interesting. First a few from the far left.  WARNING:  try not to choke while reading this.

Speaker Nancy Pelosi (D-Calif.) said it was “simply unacceptable.”

“Any final proposal from the commission should do what is right for our children and grandchildren’s economic security as well as for our nation’s fiscal security, and it must do what is right for our seniors, who are counting on the bedrock promises of Social Security and Medicare,” she said in a statement.
“The Simpson-Bowles deficit reduction plan is extremely disappointing and something that should be vigorously opposed by the American people,” Sanders said in a statement. “The huge increase in the national debt in recent years was caused by two unpaid wars, tax breaks for the wealthy, a Medicare prescription drug bill written by the pharmaceutical industry, and the Wall Street bailout. Unlike Social Security, none of these proposals were paid for.”
Mike Lux at Huffington Post;
I wrote my initial post in such a hot rage over the proposal to cut Social Security and Medicare benefits that I didn't take the time to edit my blog post (sorry about those strange sentence structures), or take the time to look at the details of the proposal. So now that I have calmly taken some time to do that, I have to admit that I was wrong: this thing is even worse than I originally thought, and I way understated the problems with it. The co-chairs and staff found every conceivable way to screw the middle class in ways big (very big) and small, but barely nicked the bankers who caused the meltdown of the economy, or the wealthy whose massive tax cuts ended the big budget surpluses as far as the eye could see coming out of the Clinton years.
The upshot - liberals hate it. It involves spending cuts and for them that is anathema. After such simple wrongness, how about a palate cleanser? First off, keep in mind everywhere you hear the words bi-partisan in relation to this commission, keep the following numbers in mind - 12 Democrats, 6 Republicans.

Now, for a conservative take on it, from National Review;
We are both pleasantly surprised and modestly encouraged by the program outlined by Erskine Bowles and Alan Simpson, the co-chairmen of the president’s deficit-reduction task force. There’s no VAT in sight, nor is there unrealistic happy-talk about balancing the budget through a federal Taylorism campaign or symbolic assaults on the unholy trinity of waste, fraud, and abuse. Instead, there is a serious series of concrete proposals for constraining entitlement costs, simplifying the tax code, and putting a leash on future federal expenditures. Whereas the Obama-Reid-Pelosi triumvirate had put the country on the road toward a national debt topping 200 percent of GDP — with $1 trillion a year in interest payments alone — the Bowles-Simpson program would stabilize the debt and begin reducing it. The program would keep the debt to 40 percent of GDP in 2037 and would bring annual deficits down to a more manageable 2.2 percent of GDP by 2015, and 1 percent in the following years.

The plan has serious defects, the main one being that it establishes a historically high level of federal claims on the economy — with government revenue equal to 21 percent of GDP — as the new normal. But it is a good start, and it represents the sort of bipartisan starting point that even the most Tea Party–steeped Republican insurgents could begin with while remaining true to their core conservative values. That is not something we’d expected to write about a proposal produced by a go-along-get-along Republican retiree and Bill Clinton’s old chief of staff.
Truly bizarro world - liberals mad at the Democrat commission and conservatives not warm to it, but agreeable that it's a good starting point. Where it leads at this point is unclear but it will prove to be an interesting road to travel.

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