The Center on Economic and Policy Research has put together an interesting deficit calculator that lets you try out different ways of stabilizing the debt:GDP ratio at different levels, while making sure to provide plenty of progressive options. For example, I decreased the Social Security cost of living adjustment by one percentage point, increased SS benefit levels for low-income seniors, boosted spending on infrastructure, research and development, and education by 1 percent of GDP, allowed all the Bush tax cuts to expire, let the estate tax return as scheduled, replaced the home mortgage interest tax deduction with a 15% tax credit, added a public option to the Affordable Care Act, imposed a tax on greenhouse gas emissions, raised gasoline taxes, enacted a variety of defense cuts, and last but by no means least implemented Joe Gagnon’s plan to have the Fed buy and hold $2 trillion worth of bonds.
The result would be a debt:GDP ratio of 52 percent by 2020 which is quite good.
These are also policies that would, in my opinion, boost growth over the short term (Gagnon plan) while cleaning the environment, boosting the fortunes of poor seniors, laying the groundwork for sustained economic growth, and probably improving American foreign policy. CEPR lays out some other ideas that I like—including changing how pharmaceutical research is financed and a clever “globalized Medicare”—and that would further decrease the deficit, but that I didn’t include on my checklist because I don’t think they’re really budgetary measures. Suffice it to say that the point is that you can find a menu of progressive policies that shrink the debt:GDP ratio to 52 percent by 2020 without even seriously tackling health care costs. On top of that, there are a lot of good progressive ideas for tackling health care costs.
To me at least this is one reason progressives shouldn’t be so allergic to the idea of debt/deficit commissions and the like. We ought to say, loud and proud, that we have good ideas for tackling the deficit and demand representation on these panels.