As the federal government becomes a health care state, there will have to be a generation of defense cuts that overwhelm anything in recent history. Keep in mind how brutal the budget pressure is going to be. According to the Government Accountability Office, if we act on entitlements today, we will still have to cut federal spending by 32 percent and raise taxes by 46 percent over the next 75 years to meet current obligations. If we postpone action for another decade, then we have to cut all non-interest federal spending by 37 percent and raise all taxes by 54 percent.This assumes that we will continue to provide and pay for health care in the manner that we do today. We can't. The math doesn't lie. A shift to preventative medicine is going to have to take place. This of course is easier said than done. For each person to begin to take responsibility for his or her own health is akin to an Apollo program or a World-War-Two-type mobilization. Infantile narcissism and the consumerism that makes it a defining characteristic of our culture will have to be put in check.
As this sort of crunch gradually tightens, Medicare will be the last to go. Spending on things like Head Start, scientific research and defense will go quicker. These spending cuts will transform America’s stature in the world, making us look a lot more like Europe today. This is why Adm. Mike Mullen called the national debt the country’s biggest security threat.
Andrew Ross Sorkin in a DealBook column this morning argues that the four-year delay in the implementation of the Basel III liquidity requirements was less a heinous capitulation on the part of bank regulators than an unavoidable acceptance of reality:
In truth, the reason that regulators ultimately chose to relax the rules was simple practicality: many banks in Europe and some in the United States would have never been able to meet the requirements without significantly reducing the amount of credit they were to extend to Main Street over the next two years, according to people involved in the Basel decision process.My problem with this is it is a continuation of the Wall Street-bailout, Too-Big-to-Fail logic: Let's go easy on the banks because if we don't they'll hurt Main Street. How is this different from calling the 1% "job creators"?