US Government Debt Different - Finance Department - University of ...

James Kwakreduction package. 45 Furthermore, the “it’s all politics” explanationonly raises the question of why politicians believe it is in their intereststo avoid doing anything about the national debt, even whenit has become a front-page issue. Deficits and the national debt areroutinely considered one of the top two economic issues facing theUnited States (along with “jobs” or “the economy”), 46 and leadersof both parties have gone out of their way to elevate their perceivedimportance among the public. If politicians nevertheless believe thatthey are better served by doing little or nothing about the issue, theremust be some factors in the political environment that make inactionthe smart strategy.143Logically speaking, there are two main ways to reduce deficits andtherefore the national debt: increasing taxes and reducing spending.At present, there are powerful political constraints against increasingtaxes and against reducing the most important categories of governmentspending. The political dynamics are particularly clear on thetax side. Opposition to tax increases, as well as support for tax cutswhenever possible, has become the central unifying feature of theRepublican Party. This goes beyond mere ideology. The party’s legislatorshave effectively committed to block any tax increase by signingthe Taxpayer Protection Pledge, conceived of and monitored by GroverNorquist and Americans for Tax Reform, which requires themto oppose any bill that would increase tax rates or tax revenues. Atpresent, a clear majority of the House of Representatives and morethan forty members of the Senate have signed the pledge, effectivelyblocking tax increases in either chamber. The pledge is enforced bythe threat to “primary” a legislator who breaks it—that is, to supporta right-wing challenger in the next Republican primary election. 47This is a credible threat because Americans for Tax Reform and likemindedgroups such as the Club for Growth and Americans for Pros-45 See Peter Wallsten, Lori Montgomery, and Scott Wilson, “Obama’s Evolution:Behind the Failed ‘Grand Bargain’ on the Debt,” The Washington Post, March 17,2012; Matt Bai, “Obama vs. Boehner: Who Killed the Debt Deal?,” The New YorkTimes, March 28, 2012.46 See, e.g., Lydia Saad, “Americans’ Worries About Economy, Budget Top OtherIssues,” Gallup, March 21, 2011; Frank Newport, “Americans’ Economic Worries:Jobs, Debt, and Politicians,” Gallup, January 12, 2012.47 See Jacob S. Hacker and Paul Pierson, Off Center: The Republican Revolution andthe Erosion of American Democracy (Yale University Press, 2005), chapters 4–5.