Monday, September 26, 2011

More on walking and chewing gum

Christina Roemer in today's New York Times argues that we need much more in the short term to try and stimulate our economy, while beginning to take credible long run steps to address our budget deficit. In short, walking and chewing gum at the same time. From the prologue to my book Balancing the Budget is a Progressive Priority:

The decision by Standard and Poor’s to downgrade the long term U.S. debt to AA+ from AAA status seems to have been triggered by the political theater we just witnessed, as well as the policy “no man’s land” into which we have arrived. For all the bluster about the deficit, the debt ceiling deal did not address the primary drivers of our long term problem: a tax code that cannot raise the revenue necessary to pay for any plausible level of overall spending, and health care costs.

We have plenty of short term problems that are going unaddressed as well. A quick look at the employment reports of the past year show that if we hadn’t lost government jobs the unemployment rate would be a percentage point lower, there is growing evidence that some sort of mortgage relief will be required to unstick the housing market, and unmet infrastructure needs to enable our economy to thrive in the 21st Century abound. Any short term economic intervention and investment seems crowded out by the noise of the debt ceiling debate and the quietness of the action so far undertaken to address the nature of the long term problem. We need to be able to walk and chew gum at the same time, but now we appear unable to do either.
The book provides a detailed outline of what the long run next steps in health care reform should look like, along with suggestions for tax reform and Social Security. It does not have to be either/or.... 


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