There are a lot of things I like about blogging, but among the best parts is when I've got a nice post partially written about something I care about, but I just can't tie it together and finish it. Sort of like how something that takes more work feels more rewarding when you achieve it, finally coming across that missing puzzle piece is just too darn fun.
This just happened to me a few minutes ago. I had written most of the post that you're about to read, but had taken a break because it seemed like it was missing something. That something came from the following clip from The Daily Show, where John Stewart interviews former Reagan policy advisor, and current economics writer at the New York Times, Bruce Bartlett. It should also be noted that Bartlett worked for Ron Paul and Jack Kemp in the mid 70's and early 80', and was part of the team that developed supply-side economics. This guy has all the credentials of a solid conservative Republican... yet even he thinks his party has gone off the deep end fiscally.
The thrust of the conversation is that, with the two major parties being the way they are now, there is next to no chance that we're going to avoid a level of debt that severely cuts into core spending programs, and starts to eat away at our economy.
This message could not come at a more perfect time. Not for me as I write this post, but because it coincides with the release of some very interesting analysis of the spending and taxation proposals the major candidates have gone public with recently. The fiscally focused think tank type organization Committee for a Responsible Federal Budget (CRFB) has been hard at work over the last few weeks crunching the numbers on how the candidates' proposals would effect the debt and deficits. Unless you love GDP data and charts galore, the 51 page paper probably isn't your can of beans, but the broad strokes of what is found within is vitally important.
The Ron Paul Approach
The closest thing to a given in this report was that Ron Paul's plans would indeed cut the debt to GDP ratio. I will say that I was a bit surprised that it only cut it an estimated nine percent from their realistic projection of where the debt would be at the end of his fictional term otherwise. This illustrates just how gargantuan the problem is, when you only get a nine percent decrease over eight years, after Ron Paul gets exactly what he wants and takes a hatchet to the federal budget. The CRFB estimated that Paul's plans would save around $2.2 trillion between huge tax cuts, and even huger spending cuts, although, of course, this assumes he both was able to get into the White House, and pass all of his plan. Neither are going to happen.
Newt Gingrich's Move
We'll move to another scenario that isn't going to happen next... Newt Gingrich's plan. You probably wont be surprised to find out that his plan is the worst. While the best estimate for Paul was a savings oof $2.2 trillion, cutting the projected debt to GDP ratio by nine percent, Gingrich's plan would increase the debt by roughly $7 trillion, or 30 percent. This would leave the debt to GDP ratio at 114 percent by the time his fictional eight years in office are over. The reason debt skyrockets so much under his watch is that he actually cuts taxes $1.9 trillion more than Ron Paul does, while also cutting spending $5.1 trillion less. This is a picture perfect cartoon the breed of fiscal insanity that comes from the far right, apparently basing his plan on the ridiculous idea that those tax cuts will magically pay for themselves several times over.
Rick Santorum's Plan
Santorum is up next, and while his numbers aren't quite as bad as Newt's, he too brings the debt to GDP ratio over 100 percent (to 104 percent), by adding $4.5 trillion, an increase of 19 percent, to the debt. The majority of this is a result of Santorum's large cuts to individual and corporate taxes. He'd cut a big ol' check to the bajillionaires of the world by cutting the capital gains and dividend taxes from 15 percent to 12 percent, get rid of the current income tax scheme and have only two brackets (10percent and 28 percent), while carving out bigger write offs for parents. He'd also cut the corporate tax in half for most corporations, while getting rid of it altogether for manufacturers. Briefly stated, Santorum makes many of the same fiscally catastrophic choices that Newt Gingrich would make, it's just that he doesn't go quite as far off the deep end.
Mitt Romney: 'Less Worse'
Romney's numbers are what I'd call "less worse". The CRFB's best guess is that Romney's plan will roughly result in the same level of debt to GDP than would happen if their current projections were not changed. They actually say it would add $250 billion, around 1percent, but spread out over eight years and that is well within the margin of error.
Romney is much more conservative (imagine that) in both his tax cuts and spending cuts. To his credit, they could cancel themselves out if he tweaked the numbers in a few places. But he also allows the debt to GDP ratio to increase, while our economy is projected to keep growing. It's sad when the best we can say about the Republican frontrunner is that he's a bit less of a thieving crook than the other candidates who steal from the next generation even more. And when you look across the aisle, you see that Obama squandered his opportunity to use the economic growth we have had this year and begin to trim the deficit. His budget proposal cuts taxes too, and spends hundreds of billions more than last year's budget, adding another $1.3 trillion to the trillions in debt we've already racked up during his presidency.
The Democrats Are No Better
If your mind is reeling from the avalanche of generational theft described here (or your heart is clenching because you fear for the future of your children, grandchildren or other youth you know and care about), I wouldn't blame you. So lets end this by going back to something easier to chew on - John Stewart's chat with Bruce Bartlett.
The fundamentals of our fiscal problems are well understood, and were foreseen decades ago. Both parties saw this coming, and yet continued to use power, when they had it, to cut taxes or spend more than they could afford, and just pass the debt on down the line. The most crux of the interview, in my mind, was after Bartlett essentially said that he didn't think the current Republican party cared about deficits, and Stewart asked him if he thought the Democrats could gain the courage to accept entitlement spending reform, and the Republicans would compromise on taxes enough to reach the sort of deal necessary to move towards fiscal sanity.
Bartlett's response was just to sigh, and shake his head no. Then, after giving a rough overview of how this problem is entirely a politically created one, Stewart asks the other most most important question of the interview. Bartlett implied that the GOP has gone insane, and after talking about that for a minute, Stewart asked whether the Democrats are capable of pushing for the sort of balanced tax reform needed, if they had control and somehow didn't have to worry about Republican opposition. Bartlett responded flatly by saying no, and describing how they'd still somehow just let the Republicans walk all over them.
He left out that the Democrats may be more likely to accept the national credit rating hitting junk status before they make a deal that would include a slowing of the growth in entitlement spending on the scale needed to avoid fiscal disaster as the Baby Boomers retire over the next couple decades. Just like they did in Obama's first two years in office, if the Democrats again take the reigns of power there is no reason to believe that they wont do exactly what they have done every time they've had power in recent times. They'll spend more, and if they raise taxes at all, it probably won't even cover the new spending, much less take substantive steps towards doing the ethical thing, living within our means and putting our country on a path towards a balanced budget.
It's no wonder former Comptroller General David Walker, one of the very few champions of fiscal sanity out there, looked back to Ross Perot's candidacy from 20 years ago in a recent article in the Houston Chronicle. As strange as Perot was, he warned us, just over 20 years ago, of the very issues that are coming to fruition today. The country needs a Ross Perot 2.0, but so far it seems all we've got available to us is more of the same garbage that got us here in the first place.