Spend more but pay less, that has become the conflict which dominates our public policy debates. Doug Elmendorf from the CBO, via Klein sums it up well.
The country faces a fundamental disconnect between the services the people expect the government to provide, particularly in the form of benefits for older Americans, and the tax revenues that people are willing to send to the government to finance those services.
This disconnect led to the heavy deficit spending that occurred since 1980. A bigger military was wanted, but we did not pay for it. Drugs for the elderly, but we did not pay for it. Very popular and it meets the desires of the populace. Getting more and not paying for it. Health care was a major topic in the last presidential election. Poll after poll showed that most Americans wanted health care reform, that it was time to cover nearly everyone (except illegals). This time, it was made clear from the start that the legislation would need to be paid for, not just added to the debt. The result? The closer we get to reform, the less popular it becomes.
With the polarization of the media, this means it becomes almost impossible to raise taxes OR cut spending. California on a national scale. The winners? Those currently benefitting from our economic structure. The status quo wins.
