3 Comments

  1. dag

    The documentary segment was really well put together. I thought it was interesting and informative, but like you, I’m cautious about drawing complex policy conclusions from a popular source.

    It is a very large and complicated problem for sure. Having as little financial or economic background as you, I’m not in any better position to comment. However, it does seem like could apply some common sense to it.

    First, reform the entitlements. I don’t think we can accept social security, Medicare, and Medicaid costing that much. I’m not sure what all the solutions would be, but we may have to make some unpopular choices. Second, raise taxes. If people want the services of government, we have to pay for them. We can have low taxes or large government programs – not both. I, of course, would choose a balance closer to keeping a vital social safety net. I think we could accomplish some of this by making our system of taxation even more progressive.

    To some degree it is a cultural problem – as evidenced by its coexistence in private and public domains. It’s exactly like the SNL skit the documentary showed. Stop buying stuff you can’t afford. I read somewhere that this financial and economic crisis may be the end to America’s consumerist and consumptionist culture. I hate to say it, but the more serious the collapse, the better lesson it may teach us about financial security.

  2. dag

    Upon further reflection, my second suggestion – raise taxes – was perhaps a little unclear. I meant that the wealthiest Americans should carry more of the tax burden. I think it’s a moral obligation. While they will likely never benefit from the services and programs they fund, they benefit from living in a country with a superior quality of life and educated and healthy population.

  3. admin

    The entitlements point you bring up is important, especially because it highlights what I think will be one of Obama’s most difficult challenges during his presidency: disappointing all the supporters who (naïvely) expect Obama’s administration to break completely free from the traditional confines of the normal wheel-greasing in Washington. Getting rid of entitlements (or more generally, making unpopular decisions) are going to disappoint a lot of voters who thought they filled in the bubble next to “The Messiah.”

    It’s not that I think Obama will fall short on any of his plans, just that the perception of the MAGNITUDE of “change” he will be bringing will cause some cognitive dissonance among voters once his policies actually go into effect. Alternatively, there’s a potentially additional challenge Obama might be facing with respect to unpopular decisions: http://www.nytimes.com/2008/11/04/opinion/04brooks.html?_r=1&ref=opinion&oref=slogin

    On the taxes issue, yeah, they’re going to have to go up somewhere. Money has to be gathered in one place if it is to be spent in another, and it’s absurdly impractical to further tax the lower income brackets. Rather, the last couple decades of historically low tax rates for the rich (from Regan to Bush II) need to be reversed.

    The moral issue is very interesting, though. I’d like to give that some further thought as it might provide enough material to formulate an entire post on the matter . . .

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