The NYT's David Leonhardt takes a look at the relatively recent phenomenon of government trying to provide services to its citizens while telling them that it won't cost them anything.
He note that "as a society gets richer, its tax rates tend to rise." As people's basic needs are met, as they no longer have to worry about their basic survival, they tend to want things such as safe and effective infrastructure, good public education, and a strong military to protect them from foreign threats.
In most societies, Leonhardt writes, a citizenry expects to have to pay for what government provides. Americans, he says, have decided relatively recently that while we like the things government provides,
we would rather not pay.Taxes are no longer rising. They fell to 18 percent of G.D.P. in 2008 and, because of the recession, to a 60-year low of 15.1 percent last year.
Yet our desire for government services just keeps growing. We added a prescription drug benefit to Medicare. Farm subsidies are sacrosanct. Social Security is the third rail of politics.
This disconnect is, far and away, the main reason for our huge budget problems. Yes, the wars in Iraq and Afghanistan, the recession and the stimulus have all added to the deficit. But they are minor issues in the long run. By 2020, government spending is projected to equal 26 percent (and rising) of G.D.P., mostly because of Medicare and Social Security. Taxes are on pace to equal just 19 percent.
On Friday, Congressional Republicans named six members of a deficit commission that President Obama created last month. In all, the commission will have 10 Democratic members and eight Republicans. It is scheduled to issue its recommendations late this year.
“By any reasonable projection, we’re on an utterly unsustainable path,” Peter Orszag, the White House budget director, told me last week. “And the fiscal commission, while not guaranteed to succeed, offers the best hope of getting ahead of this problem before it becomes a true crisis.”
The commission can succeed, of course, only if it comes up with solutions that Congress and the White House accept. For now, political leaders in both parties are still in denial about what the solution will entail. To be fair, so is much of the public.
What needs to happen? Spending will need to be cut, and taxes will need to rise. They won’t need to rise just on households making more than $250,000, as Mr. Obama has suggested. They will probably need to rise on your household, however much you make.
It is unlikely that any politicians currently in office will have the will to suggest significant spending cuts combined with tax increases. On the left, any solution that targets elements of the social safety net is considered a non-starter. On the right, any solution that involves cutting military spending or any kind of tax increase is characterized as nothing less than treasonous.
It is likely that nothing short of a catastrophe will jolt the public enough to be willing to at least debate making hard, politically difficult choices. Sustained, widespread power outages due to a decaying electricity grid would disrupt the lives of enough people to make some willing to listen to solutions that they would refuse to hear under less dramatic conditions. The inability to defend our national interests or our own territory would be another.
