Accessible overview of America’s contentious deficit politics by the Wall Street Journal’s economics editor.
Anticipating another summer of posturing and gridlock over the federal budget as President Obama’s re-election hopes and the majority of both houses of Congress hang in the balance, Wessel (In Fed We Trust: Ben Bernanke’s War on the Great Panic, 2009, etc.) provides a slender but highly informative volume designed to give voters a grip on what exactly is at stake in this corrosive battle. He begins by clarifying some common misunderstandings: Almost two-thirds of the budget gets spent automatically, with or without the consent or amendment of the current Congress; the U.S. defense budget exceeds those of the next 17 largest powers (including Russia and China) combined; Americans pay less of their income in taxes than citizens of any other developed nation, and have been paying less and less in taxes for 30 years. Wessel then tries to answer the most basic questions about the deficit: how we got here, where the money goes and comes from, and why we need to solve the problem sooner rather than later. He’s the least successful on the last question; the best argument seems to be, “Because everyone thinks so.” Wessel cites experts from left and right, including Paul Krugman and Paul Ryan, among others, without stating a preference for any side. (The hero of the story seems to be Defense Secretary Leon Panetta, a nonideological Democrat who, as a congressman, helped forge agreements that made the surpluses of the 1990s possible.) Without explicitly recommending a course, Wessel makes clear that a solution to the problem would necessarily be repugnant to all sides and would include some major changes to entitlement programs as well as increases in taxes for at least several years.
Wessel doesn’t tell you how to think, but he does give you the facts to think more clearly about what needs to be done.