Samuelson in today’s WaPo:
Given an aging population — which boosts Social Security and Medicare spending — government is automatically expanding. Since 1971, federal spending has averaged 21 percent of the economy (gross domestic product); just continuing present programs could easily raise that to 28 percent of GDP by 2021. The liberal-reactionaries can’t smoothly finance that. In 2011, the deficit is already twice the entire defense budget. The richest 10 percent already pay 55 percent of federal taxes. The blanket embrace of all benefits for the elderly — no matter how rich — will require much higher taxes or steep cuts in other programs, including those for the poor.
The conservative-radicals are no better. Since 1971, federal taxes have averaged about 18 percent of GDP. There is no believable plan to reduce federal spending below that level, even with sizable cuts in Social Security and Medicare benefits. So promises of more tax cuts either border on dishonesty or imply huge unspecified spending cuts that would devastate national defense, states and localities, and the poor.
Our politicians prefer self-serving fantasies. Americans are misinformed, and consensus becomes harder. Democrats won’t admit the need for major benefit cuts in Social Security and Medicare; Republicans won’t concede the necessity for higher taxes. The result is that our leaders are now playing a game of brinksmanship over raising the federal debt ceiling or defaulting. Liberals say spending cuts now would subvert the recovery; conservatives find that an excuse not to cut. Surely a compromise would be phasing in credible future cuts.
All this from “the world’s greatest nation.” It lowers our competence and elevates our national embarrassment. Altogether, an unhappy birthday