The New York Times invites you to eliminate the federal deficit by picking and choosing among 16 options. I agree with Arnold Kling and David Henderson about the takeaway message: It’s really really easy to cut the deficit to zero without raising taxes. And that’s without even eliminating any agencies.
Moreover, the Bowles-Simpson proposals include dozens of additional specific recommendations that are not listed on the Times site. So cutting spending is even easier than the Times makes it appear.
If you want to raise taxes, the Times offers some very good ideas, like reducing the tax break for employer-provided health insurance, though a far better idea would be to eliminate the tax break for employer-provided health insurance. It also offers some very bad ideas, like raising capital gains taxes and limiting the mortgage interest deduction. A good idea would be to reduce the taxes on capital and interest to zero.
You can also opt for a national sales tax, an option I’d select if I could be assured of a corresponding reduction in the income tax. But as a practical matter, I’m afraid that more sources of revenue mean more revenue for the government.
But again—the site shows that you can easily get to zero without raising any taxes, and the Bowles/Simpson document shows that it’s even easier than it looks in the Times.
Meanwhile, Paul Krugman links to a CBS survey showing that only 4% of the population chooses “Budget Deficit/National Debt” as their top priority from a list of “problems the Congress should address” — a list of options that does not include government spending! If you asked me to rank the problems Congress should address, in order of priority, spending would be number one and the budget deficit would probably not make the top 25. The fact that nobody is focused on the deficit seems to me to be a hopeful indication of economic literacy. The fact that nobody chooses spending when spending is not listed among the options tells us — exactly nothing.
