Rich Gardner | 01.03.2011
about the discussion on Face the Nation is that everyone seems to have bought into the notion that the deficit is some sort of crisis that the nation must face immediately.
It isn’t. It’s a back-burner issue that should be solved eventually, but which isn’t an immediate problem by any stretch of the imagination.
Someone used the metaphor that the deficit is an “all hands on deck” type of issue. I don’t object to using a Navy-type metaphor, but I think a far better metaphor would be that the ship’s captain needs to sit down with all of his or her officers, they need to hammer out a carefully-considered plan and then the captain should announce to the crew the course the ship will follow for the next few years. A situation of deep indebtedness is not best handled by panicked, frantic, hurried actions, but by adopting a well-thought-out long-range plan.
Our creditors will wait. No one wants to bankrupt the nation, no one wants to push America over the edge because the nation is up against any sort of deadline, there is no such deadline. There was no deadline when G.W. Bush started two wars without paying for them, there was no crisis when G.W. Bush initiated Medicare Part D without finding any way to pay for it, there most certainly was no such deadline when G.W. Bush gave millionaires and billionaires massive tax cuts without, again, finding any way to pay for them.
Marginal tax rates (everything you make up to a specified cut-off is taxed at one rate, everything above that specified level is taxed at another rate) used to be 91%. John F. Kennedy lowered them to 77% and the economy improved. Problem is, every further reduction in the tax rate has run into the problem of diminishing marginal utility. Every additional slicing of the tax rates since Kennedy’s initial cut does less and less good. The Bush cuts did no discernible good whatsoever. The US can and should return the top marginal tax rate to Lyndon Johnson’s rate of 70%. We have an extremely serious problem of inequality between the very wealthiest and regular citizens anyway. With that money, we can get the economy moving again and can start working on clean, renewable energy, getting millions of citizens hired.