Tag Archives: Social Security

The only way to achieve true fiscal discipline: Learn arithmetic

Arithmetic and history. Two of my favorite subjects in school. I covered some history two posts ago (the Whisky Rebellion). Let’s do some arithmetic now.

Attention is currently focused on threats of a government shut-down, either when a continuing resolution is required from Congress in March in order to keep the government operating, or a few months later, when an increase in the national debt ceiling is required. The common description of this showdown as a high-stakes game of chicken has it right. But some of the Tea Partiers say that their goal is literally to avoid an increase in the debt ceiling – not just as a bargaining ploy nor as an abstract goal, but in the sense that they want to cut spending so sharply that there is no need to borrow any more after this spring. Similarly, Senators Mike Lee (Utah) and John Kyl (Ariz.) have revived the proposal for a constitutional amendment requiring a balanced budget. And of course they all want to do it without raising taxes, and in most cases without cutting defense, Social Security or Medicare. Oh, and don’t cut farm subsidies either. read more

Time to Grab the Third Rail: Address the Fiscal Problem by Social Security Reform

The current economic question is what to do about budget deficits. The Greek crisis has made sovereign debt a genuine concern even among advanced countries. (I should say “especially among advanced countries,” because developing countries now have stronger fiscal positions, in a historic reversal of roles.) At this weekend’s G-20 Summit, Germany and the UK are defending strong fiscal austerity, with language that doesn’t even allow for the idea that short-term spending might be expansionary under severe recessionary conditions such as 2008-09. In the US, Peter Orszag is reported this week to have resigned as OMB Director, not just to get married, but supposedly in part out of frustration about the fiscal outlook and President Obama’s refusal, as part of any comprehensive deficit correction program, to reverse his campaign pledge against raising taxes on those earning less than $250,000. read more

Ten Ways to Move the Budget Back Toward a Sustainable Path

Question from the National Journal: “President Obama and his team said recently that the fiscal 2011 budget will represent a credible effort to reduce budget deficits and put the federal government on a path toward “sustainable” deficits …How would you alter taxes and spending to achieve (or at least pursue) that goal? ”

Here are my ten proposals to move the budget back to a sustainable path (like the one it was on until January 2001):

First, auction off most greenhouse gas emission permits, rather than giving them away to firms (which would confer windfall profits). This is what President Obama originally proposed last February, but it is not in the congressional climat change legislation. read more