(6 of 6)
There's a lot of potential common ground in that list. But compromises like these won't happen unless two conditions are met. The first is that taxes can no longer be a game of political chicken, with each side waiting to pounce on whoever utters the T word first. Since that game has been the Republican strategy for 30 years, a national breakthrough will require Republican statesmen who will tell the public the truth: that higher tax revenue as a share of GDP must be part of the fiscal solution, just as much as sensible tax reform and compromises on how and where the revenue is spent. Unfortunately, a proposal for a bipartisan commission that might have moved the country in that direction was recently nixed by Senate Republicans, precisely out of fear that some Republican commission members might have signed on to such a compromise. The uncompromising, antitax Republican position is simply too good at the polls. So now we'll need straight-up leadership, without the shield of a commission.
Second, Congress and the White House have to be weaned off lobbyists, who have done so much to foster the antitax mood. This past year saw another record for lobbying outlays, as corporate funds were shoveled into campaigns and the pockets of members of Congress, their staffs and their families. The recent Supreme Court ruling on corporate campaign financing may have temporarily killed the chance to restrain the pernicious role of money in politics.
Only the size of our problem and the centrality of the U.S. in the world economy make the U.S. unique. Countless countries have gone through fiscal adjustments involving politically painful tax increases and spending cuts. Ireland and the U.K. are now raising taxes to reduce gaping budget deficits. Canada adopted a VAT-type tax in the 1990s. The U.S. has often pushed the International Monetary Fund to tell countries much poorer and more fragile than our own that painful fiscal adjustments are needed. Now the U.S. is acting with the same irresponsibility we've so often bemoaned elsewhere.
So here are the key questions. Will we kill our economic future by shortchanging the public on investments needed to modernize the economy and train the workforce? Will we borrow heavily from China and other countries to cover today's spending while racking up massive bills for our children? Or might we just decide to protect the future of our country through a judicious mix of tax increases and spending cuts that will bring honor to this generation and prosperity to the next?
Sachs is the director of Columbia University's Earth Institute and the author of Common Wealth