15 January 2010

Budget woes

Everyone wants to blast everyone about the deficit. But nobody, and I mean nobody, in either party wants to consider doing anything serious about it. Here, though, is a perfectly straightforward proposal from Kevin Drum in Mother Jones:
But if we were even close to having a sane political class in this country, it wouldn't be that hard to hit this target: (1) Let the Bush tax cuts expire. Nobody was overtaxed in the 90s. (2) Do a conventional fix for Social Security. This would be good for another 1% or so. (3) Get serious about reining in Medicare costs. Squeezing another 1% via Medicare changes wouldn't be that difficult if both parties were willing to treat it as a real problem instead of a chance for demagoguery. (4) Add in a modest assortment of spending cuts (smaller military, unprivatized student loan, reduced ag subsidies) and revenue increases (estate taxes, carbon taxes, financial transaction taxes) and you'd get the rest of the way there. If you don't like these suggestions, feel free to sub in your own ideas here.

For a country as big and rich as the United States, this stuff isn't even very painful. We could do it in a single legislative session and 99% of the country would barely notice the effects. And yet it's the next best thing to impossible. It doesn't speak well for our future.

My modest change would be to craft a series of taxes and tax credits to lower our dependence on petroleum, not for any 'Green' reason, but simply as a necessary step for national defense. But then, I am not part of any political class, sane or otherwise.

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At 15 January, 2010 22:40, Blogger jack perry said...

You're starting to sound like Krauthammer now. He advocates a baseline tax on gasoline that ensures $4/gallon. I'd agree as long as it was in urban and suburban areas, but I think rural areas should be exempt, since it's infeasible to build mass transit there.

At 17 January, 2010 16:12, Blogger Clemens said...

Jack, that is the most crushing refutation of one of my arguments you have ever made! 'Krauthammer agrees with you.' How cruel.

Seriously though, even a blind chicken gets some corn (you may apply that to either me or K. as your discrimination dictates).

But I really do think we are right. The tax, along with a suite of taxes on anything on a vehicle that causes mpg to go down and incentives on everything that makes it go up, is necessary. Rural areas too, though there could be differences for farm production and all taxpayers below a certain income could get tax cuts or rebates.

Much more could be done with public transportation using part of the revenue. Rural mass transit is not any more infeasible than in urban areas, though it might be less convenient. I lived for about 3 months in rural Mexico using nothing but their bus system.

In the meantime, we could at least even up the difference in taxes on diesel and gas so that the more efficient diesels would be more practical and affordable. As it is, the new Ford Fiesta with a diesel in Europe gets 65 mpg, but there are no plans to offer it to Americans: our version will be a gas engine that gets about 45 mpg.

And I stress - this is NOT a feel good, life style choice, but a strategic move in a dangerous world.


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