Samuelson on the U.S. Fiscal “Candor Gap”

Robert Samuelson writes on the nation’s fiscal “candor gap” in today’s Washington Post, arguing that it’s time to stop whistling past the fiscal graveyard in D.C. and start making tough decisions on spending cuts:

In all the recent reports, speeches and news conferences concerning the federal budget outlook — including the administration’s proposed budget for 2011 — hardly anyone has posed these crucial questions: What should the federal government do and why; and who should pay? We ought to go back to first principles of defining a desirable role for government and abandon the expedient of assuming that anyone receiving a federal benefit is morally entitled to it simply because it’s been received before. […]

We can no longer just tinker. We need to ask whether government spending serves genuine public purposes or merely benefits favored constituencies. Delay in acting has already eliminated a long grace period to prepare for reduced retirement benefits or to wind down useless programs. Now, we are condemned to be unfair. If we don’t cut spending, the young may complain (correctly) that they’re burdened with crushing tax increases; if we do cut spending, beneficiaries may complain (correctly) that they didn’t receive ample warning.

The politics of procrastination is bipartisan and rests on shared assumptions: that the public won’t stomach hard choices; that we don’t know whether large budget deficits will produce a crisis or when; and that, therefore, the easiest political course is to dawdle and blame the other party. But this self-serving inattention, coupled with much larger deficits, is tempting fate. If investors lose confidence in Treasury bonds, they would demand much higher interest rates. The ensuing crisis would almost certainly compel abrupt spending cuts and tax increases that would make today’s choices look gentle.