Follow Up on my National Debt Post

The current recession had nothing to do with not only the size of our government but it also had nothing to do with tax levels. Business and individual have not faced a tax increase since 1993. We've had two recessions since then. In fact, one of the biggest economic booms this country has ever witnessed happened after the tax increases of 1993 and in the middle of various tax credits -mainly aimed at people with children, Per Child Tax credit and IRA accounts- in 1997. (For a fact sheet of the U.S. tax system, I highly recommend this site of the U.S. Treasury Department.) Yes tax revenue goes up when you lower taxes but their is a point where this becomes counter productive and their is a simple truth which is this: lower taxes, leave taxes alone, or raise taxes tax revenue still goes up because of population and business, therefore job growth.

Now everytime this country has cut taxes the national debt and deficit spending has grown. Maybe the happy medium is the tax levels of the mid-late 90's or maybe it isn't. This country however needs to fundamentally decide whether it cares about tax rates or deficits and our debt. Clearly this country is never going to have a party willing to make the hard cuts in order eliminate our debt. The worst part is that when either party puts forth a plan to eventually end our dept, say for instance Rep-R Paul Pyan's Roadmap 2.0 plan recently introduced, and as Ezra Klien of the Washington Post even noted that it is a plan put forth that offers a solution relative to the problem. The problem with the plan of course is that it's doubtful it is a solution the vast majority of American voters are willing to accept. As much as they may decry government spending and our country's debt, they decry less services even more.

This New Yorker article by James Surowiecki highlights the contradictions in the current anti-government populism.

... The electorate, we hear, wants Barack Obama to be more of an economic populist but less of an ambitious reformer. He has to aggressively create jobs but also be less spendthrift. This advice may be contradictory, but then so are the economic opinions of the many angry voters who are animating what’s being called the new populism. Whereas the economic populism of the eighteen-nineties and the right-wing cultural populism of recent years represented reasonably coherent ideologies, this new populism has stitched together incompatible concerns and goals into one “I’m mad as hell” quilt. The people may have spoken. It’s just not clear that they’re making any sense.
...
Similarly, the failure of free markets during the financial crisis might have led people to think that the government should be more involved in the economy. Instead, the percentage of Americans who think government is trying to do too much is higher than it’s been since the late nineties. ...a survey of voters who supported Obama in 2008 but voted for Scott Brown in the recent Massachusetts Senate race found that forty-one per cent of those who opposed health-care reform weren’t sure whether reform went too far or not far enough.

The problem is that you fundamentally have two extremely different philosophies mixed in with pragmatists. On the one hand you have those that want nothing but defense program spending and a little of this or that. On the other you have those that want a single payer health care system, a social security that pays more, essentially everything done at the federal level. Meanwhile you have pragmatists that just want reasonable programs that are only as big as necassary and that don't run up deficit spending and our debt. They're less concerned with big or small government and more concerned with "is that a reasonable function of government that fixes a problem and is it worth the cost?". How a President and Congress is supposed to govern with this very volitile mix is impossible to say -except of course by ideologues. Which would you choose? Politically killing tax increases to curb the deficit and debt or massive cuts to very popular programs that have very loud constituents? Both will have political costs.