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The Day After We Borrow

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Not long ago, I finagled my way into a conference featuring a number of top economists discussing the future of government.

These experts helpfully synthesized a bunch of intricate numbers and created PowerPoint presentations sprinkled with graphs that illustrated a pending stratospheric explosion of debt and spending -- for which the technical term, I believe, was "we're screwed."

Americans might have a similar reaction to the much-heralded suggestions of the co-chairmen of the deficit commission convened by President Barack Obama. Reality is that even this modest hodgepodge of tax hikes and spending cuts pasted together by the co-chairmen is unlikely to pass the entire committee, much less Congress.

But it may be good news in the end.

To begin with, the $200 billion in spending cuts we're talking about are reductions in planned spending. That's like promising to lose 10 pounds in two years -- after first gaining 20. And if politicians remain true to their calling, we know that discretionary budgets cuts will last until the first "emergency" emerges. New taxes and spending programs, on the other hand, typically sunset when the sun actually runs out of hydrogen.

As it stands, the plan is nearly devoid of any fundamental reforms transforming the way government operates, save two areas -- neither of which has a chance with Democrats in control.

For kicks, let's engage in a thought experiment to highlight the hurdles. Suspend your disbelief momentarily and allow that Republicans are serious this time around about cutting government's size and spending. Also allow that the GOP would be agreeable -- as some have intimated -- to cutting military spending, raising some taxes, removing exemptions, cutting agricultural subsidies, etc., in a larger compromise.

Would it matter?

Democrats believe we have a taxing problem -- more specifically, a not-taxing-the-rich-enough problem -- rather than a spending problem. How many times have we heard the silly platitude about having to "pay" for tax cuts? We pay for spending, not tax cuts.

But that particular impenetrable philosophical divide is just the beginning. Outside of military spending, the co-chairmen found that one of the most effective ways to save money -- about $30 billion yearly -- is to shave 10 percent of the federal work force and freeze all salaries.

Not a big deal, considering USA Today recently reported that the number of people in the massive federal work force earning more than $150,000 had doubled since January 2009 -- long after Washington supposedly understood the magnitude of the problem.

As you know, public employees are the wellspring of left-wing political support. The American Federation of State, County and Municipal Employees was the single largest outside spender on the 2010 elections. Public-sector unions spent more than the U.S. Chamber of Commerce, despite what you may have heard. And they spent taxpayer dollars. What are the chances of Democrats cutting 10 percent of that support?

What's holier than a government pension? An entitlement program, of course. Democrats aren't interested in "reforming" these programs; they're interested in finding ways to pay for them. There's a difference. (Remember that the last time liberals decided it was time for reform, Washington took over an eighth of the economy.)

Let's not forget that Social Security -- a program that offers the American citizen less return on his dollar than a simple savings account -- is the shining example of munificent liberal governance. Which actually makes sense.

Conversely, if conservatives are serious about this -- the House GOP plan offered up a puny $100 billion in cuts, so it's doubtful -- this is the time for genuine, consequential, long-term reform.

Republicans, for instance, should not cave on tax hikes without a plan that would seriously flatten and simplify the entire system. Do fiscal conservatives believe that tax hikes dampen economic growth -- an eventuality this commission's plan doesn't take into account -- or not?

And if conservatives believe that discretionary spending is temporary and entitlement programs are forever, they should demand embedded caps on all spending and revenue and a balanced budget in perpetuity.

Because at this point, we already know the positions. We know where the spending is. We know where the unsustainable growth is happening. We also know that tinkering on the margins would do nothing much. What we don't know is whether anyone is serious about fixing it.

(Jeez, we're screwed.)

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