Deficits Are Future Taxes (DAFT) says Mike Munger in an op-ed in today's Raleigh, (N.C.) News and Observer. This should worry both Republicans (Conservatives) and Democrats (Liberals/Progressives) because in shoving hard decisions off to the future by continuing to run deficits, both 'sides' put their main interests in jeopardy: Conservatives low taxes and Progessives/Liberals protection of programs that they believe to be key, such as Social Security and Medicare.
I wrote about 10 days ago that our country needs to take up the fight about the long term deficit in the next Congress, and not delay this further to the future. We will eventually deal with it, the only question is whether we do so in the midst of a crisis when options will be limited, or whether we do so while there is time to have reasoned debate.
I don't think the tax deal is as bad as Mike does, IF it is truly a short term deal. If it turns out to be long term, we will have huge deficits in the near future to pay for anything other than Social Security, Medicare/Medicaid, Defense, and interest on the debt. This tax code cannot raise more than 16-17% of GDP in even in a normal economy, and the cuts proposed by the Bowles/Simpson Commission to get to balance at 21% of GDP were seen as too draconian by many. This tax code and any level of spending that has a chance of being enacted is completely unsustainable.
The 'sides' need to work together and fight this out, starting in the next Congress, for the good of the country.
I believe the President is going to do the right thing in the next Congress and propose a serious tax reform in the short term that will increase the amount of taxes collected by the federal government. And begin the conversation about reducing spending over what it is projected to be over the long term. The stars are aligning and the best policy also represents the President's best chance for re-election. I am a lifelong North Carolinian, and winning N.C. again will be hard for the President, period (it was plenty hard last time, and on Labor Day 2008 I would have bet a lot of money that he couldn't win NC, even as I was going door-to-door for his campaign). Seriously addressing our long term fiscal crisis through difficult choices strikes me as his only hope with the many independents, and independent-minded Democrats who live east of I-95 in North Carolina and who default to voting for Republicans in Presidential elections.
If the President takes the risky move of being the first to truly lay out the hard choices as someone with a lot to lose, he will go down in my mind as a great President, regardless of the outcome of the next election.