Kathy Jennings and Lynn M. Zott. The US Deficit: Opposing Viewpoints. Greenhaven, 2013. See here to purchase the book.
This book contains different points-of-view on the federal budget deficit. It was published in 2013, so it largely focuses on the budget battles of 2011: the sequester, the Simpson-Bowles commission, etc. It discusses whether the deficit is a serious economic problem, as well as the relationship of entitlements, taxes, and defense spending to the deficit.
Here are some thoughts and observations:
A. Those who think that the deficit is a massive problem, to be ameliorated through tax increases and/or cuts in government spending, predict high interest rates and drastic economic slowdown if the deficit is not reduced. The other side, by contrast, maintains that the federal government may need to spend more money to stimulate the economy, deficits notwithstanding, and the economic growth will lead to more tax revenues and allow the deficit to take care of itself. To the deficit hawk side, I ask why we have not seen the massive problems that it has predicted, even though the U.S. has trillions of dollars in debt. To the Keynesian side, I can somewhat agree with the deficit hawks who question whether more government spending necessarily leads to stimulus, since such an argument assumes that the government efficiently allocates resources, which has been debated.
B. Some of the contributions were rather tepid in defending the position that is attributed to them. The Congressional Budget Office explains how “Raising Taxes Can Help Reduce the Budget Deficit,” but it candidly admits that taxes can have a constraining impact on businesses.
C. The section on defense is a little one-sided. It could have included more of a pro-defense contribution. That is not to say that I disliked the critiques of bloated defense spending or the U.S. being the world policeman.
D. On the section about entitlements, the view that entitlements impact the deficit looks almost like a no-brainer. Yet, my question to this position is the same as my question to the deficit hawks in (A.): why have we not seen the apocalyptic events that such a position forecasted? Some of the dates when they said things would fall apart have already come and gone. Alan S. Blinder has a contribution, “Cuts Should Be Made to Health Care Costs, Not to Entitlement Programs.” That first part is rather obvious, too obvious to be stated, without offering proposals as to how to do this. James Kwak has an excellent article, entitled in this book as “Cutting Medicare Spending Is Unnecessary Because It Is an Affordable Program.” It proposes simple common-sense reforms that can bring Medicare more money, as well as observes that, though health care costs rise, so does federal revenue. There is some unclarity in the section about whether today’s workers subsidize today’s retirees in the Social Security System, or if they actually are storing money in Social Security for their own retirement down the road.
The book could have been better, but it is a decent overview of the topic.
I checked this book out from the library. My review is honest.