Mar 04, 2013 at 1:02 pm
Two avowed centrists, Tom Mann and Norm Ornstein, have a nice “myths” piece in yesterday’s WaPo. I’m running off to do the Diane Rehm radio show on this stuff, so no time to summarize, but I particularly liked this point:
2. At least the automatic cuts will reduce runaway spending and begin to control the deficit.
What runaway spending? The $787 billion stimulus was a one-time expenditure that has come and gone. Under current law, not including the sequester, non-defense discretionary spending as a share of the economy will shrink to a level not seen in 50 years. Defense spending grew substantially over the past decade, but that pattern has slowed and will soon end. Additional reductions must be achieved intelligently, tied to legitimate national security needs.
Across-the-board cuts can have perverse effects on deficits; as services are cut, the fees users pay for those services are lost. For example, sequester-driven furloughs of air-traffic controllers will lead to the number of flights being reduced.
The annual budget deficit is projected to fall by almost 50 percent in 2013 compared with the height of the recession. Reducing the deficit over the long term requires going where the money is — boosting economic growth, controlling health-care costs and increasing revenue to handle the expense of an aging population [my bold: JB]. Deeper discretionary-spending cuts are counterproductive; immediate cuts, as Europe has made, could lead to a recession and bigger deficits.
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