The Fix The Debt Two-Step

Moneybox
A blog about business and economics.
Nov. 21 2012 9:59 AM

The Fix The Debt Two-Step

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WASHINGTON, DC - SEPTEMBER 12: Co-chair of the National Commission on Fiscal Responsibility and Reform and former White House Chief of Staff under the Clinton Administration Erskine Bowles speaks to the media during a news conference at the National Press Club September 12, 2011 in Washington, DC.

Photo by Alex Wong/Getty Images

I had some frustrating dialogue with whoever runs the Fix The Debt twitter account last night, centered around my observation that it's strange for a group allegedly all about the need for deficit reduction to have advocacy for lower tax rates as one of its core principles.

The first response I got was that Fix The Debt thinks a comprehensive solution needs to be bipartisan, and that revenue-positive rate-cutting tax reform is much more viable as a locus of bipartisan compromise than rate hikes. That's absolutely true, but it's simply false that a solution needs to be bipartisan. Unless congress passes a tax cut bill this month and the president signs it into law, tax rates will automatically rise precipitating a large cut in the budget deficit

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So having zigged, the conversation then zags and we hear that this kind of rapid deficit-reduction would be economically harmful. What we really need is "smart" fiscal consolidation.

Thumbs up. Right on. But here's where we shift out of breathtaking dishonesty terrain and into staggering hypocrisy terrain. This outfit, after all, is called Fix The Debt. Its messaging is all about the evils of the national debt. Its core thesis is that high levels of government borrowing are setting us up for a catastrophic economic collapse. Indeed, it was precisely on those grounds that these people spent all of 2009, 2010, and 2011 arguing that we shouldn't let short-term labor market problems distract us from the urgent need for long-term deficit reduction. If you really believed any of that, there's just no way you'd be out there with all this fiscal cliff scaremongering. What you'd say instead is that, yes, the fiscal cliff is bad. Yes, ideally congress would avoid it. But the fact remains that the fiscal cliff is a mechanism for the vital task of long-term debt reduction and the overwhelmingly most important thing is that congress not fear the cliff so much that they merely further delay action.

But Fix The Debt isn't saying that because they're not actually so dumb as to believe their own nonsense about the overwhelming importance of debt reduction.

What they believe in, instead, is the overwhelmingly importance of rate-cutting tax reform and reduced spending on retirement programs. Which is fine. Tax reform and the appropriate level of spending on bolstering the living standards of retired people are legitimate topics for debate. But if you saw a bunch of Quakers running around in a panic about the national debt pushing a plan to reduce the debt by cutting military spending, and then loudly objecting to all debt-reduction plans that don't slash military spending you'd rapidly reach the conclusion that the Quakers don't actually care about the national debt. They're just pacifists. And good for them! But it would be extremely frustrating for them to run around pretending to be accountants.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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