Monday, October 08, 2012

The Budget and the Debt: Two Good Books

Sometimes good things really do come in pairs.  Last spring I read, back to back, two super introductions to the tax system.  This week, here's another pairing, this on the conjoined problems of budget/debt.

That would be: Red Ink by David Wessell, and White House Burning by Simon Johnson and James Kwak.  They're not identical, neither in content nor in style.  Wessell mostly limits himself to the mechanics of the budgetary process.  Johnson/Kwak cover everything from from the War of 1812 (actually, from 1789) to the beginning of the next ice age.  Wessell, though he has a narrative, still reads a bit like one who makes his paycheck meeting a daily deadline.   Johnson/Kwak remind you that their ideas may have started in the classroom.  But at the end of the day, they're both telling the same story.   That is: we've got a debt problem--maybe not critical today and perhaps not even tomorrow, but bound to come home to roost within the lifetime of a large part of the voting public.  And we can't solve it by icing Big Bird.

You knew that.  You know the litany of conventional responses: we raises taxes, or we cut taxes and solve the problem on the backs and necks of the poor.  Neither book really challenges that framework, although Johnson/Kwak do throw out a couple of points that don't seem (to me) to have gotten the attention they deserve.

One: cutting "government spending" does not necessarily cut spending.  You'd think the voters--particularly in a place like California, where we started capping taxes in 1979--would have figured this out before.  There's  no end of instances out here were voters who rejected the notion of paying taxes for something or other have waked up to discover they have to pay, ahem user fees for the same damn thing. Stuff is not free; if you don't pay for it one way, you may wind up paying for it another. Like I say,  not rocket science.  Surprising we would even need Kwak/Johnson to remind us.

The other is perhaps one step more subtle.   This one addresses the supposed peril of increases taxes--i.e., the peril that as tax increase will destroy jobs.  Grant it: given the right particulars; still the point is that if true, then we have not a tax problem but an employment problem.

At the end of the day, there's probably nothing much in either book not already well known by the conscientious wonk.  But never so well presented.  If I had to read just one, I'd go for Kwak/Johnson, but go ahead and read them both; well worth the effort.

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