Dealing with Deficits

The recurring Congressional battle of the budget is playing out again: What can be cut? Should the borrowing limit be raised? Can funds be moved from A to B? Historically, the battle ends with Republicans and Democrats agreeing to raise spending while cutting taxes and making up the difference with more borrowed money. Deficit spending is the norm.

Thinking only of the deficits that result from the government spending more than it expects to take in ignores the daily deficits that are keeping America from reaching its potential. We have:

• Healthcare deficits
• Educational achievement deficits
• Infrastructure deficits
• Environmental quality deficits
• Racial equity deficits
• Affordable housing deficits
• Work force development deficits
• Community safety deficits

A Fifty Year Perspective blog post reported the United States spends far less, as a percent of Gross Domestic Product, than other OECD countries in providing citizens with infrastructure and social services necessary to lead productive lives. Americans need more federal spending to eliminate these deficits.

The U.S. has a lower rate of taxation on wealthy families and individuals than 23 of 38 OECD countries. Raising the U.S. top income tax rate is a reasonable response for eliminating budget deficits as well as government services deficits.