President's Deficit Plan Recaptures the Fiscal High Road—Almost
The President also offered a strong counter to the worst elements of the conservative budget orthodoxy.
The President also offered a strong counter to the worst elements of the conservative budget orthodoxy. He either explicitly or implicitly rejected the most economically damaging proposals, including: continuation of the Bush tax slashing ideology that brought us a job-growth-free decade; an 18 percent GDP spending cap that would guarantee our international decline; and privatization and block granting of Medicare and Medicaid.
Unfortunately, the President has retreated from the urgency of joblessness. He resisted proposals that would send us back into Recession, yes, but where is the plan to put 29 million under- and unemployed Americans back to work? He rejected the right-wing war against the American government, yes, but when will he wage war against economic inequality and middle-class decline, for which government is the most powerful weapon?
With federal tax receipts at the lowest share of the economy in three generations -- and corporate taxes at a record low, any legitimate deficit plan must raise considerable revenue. The President does not appear to have that intention. His plan embraces the same basic bad math of the Bowles-Simpson plan: $3 in spending cuts for every $1 in additional tax revenue. Fortunately, the inclusion of interest payments with spending will provide more balance than the economically unsound Bowles-Simpson approach.