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Why "Bowles-Simpson" is a con job

Young Ezra exposes the con here, even if he doesn't know that's what he's doing:

3) There are so many tax increases that the plan is nearly 1:1. According to CBPP’s calculations, Simpson-Bowles includes $2.9 trillion in spending cuts and $2.6 trillion in tax increases. That’s 1.1:1. If you add the $800 billion in projected interest savings to the spending side, then it’s 1.4:1. ...

9) The Social Security changes. Simpson-Bowles makes three main changes to Social Security. It increases the taxable maximum on income to 90 percent of all income, which raises $238 billion over the next decade. It uses a different measure of inflation to slow cost-of-living adjustments. It raises the retirement age to 68 in 2050 and 69 in 2075.

"1:1" -- notice how Ezra doesn't even need to give the terms of ratio, so pervasive is this trope among insiders -- means a one-to-one ratio of tax increases to spending cuts. And this is the con. We can understand this by looking at another pyramid:


winter scene

For the rich, the tax increases involve sacrifices at the top of Maslow's pyramid: Self-actualization territory. Maybe they'll have to forgo those symphony concert tickets, or that gym membership, or a few extra sessions with Dr. Malfi. For the sake of convenience, we'll call these top-level sacrifices "apples."

For the rest of us, the spending cuts -- and especially cuts to social insurance programs -- are at the bottom of Maslow's pyramid: Safety and physiology. Food, shelter, clothing, a place to sleep. Imagine, these grinning sanctimonious heartless weasels want to cut $1,000 from the $14,000 pension of an 85-year-old woman, and I guarantee you, she's not going to be giving up tickets to classical music performances. She's going to be buying cheaper food, turning down the heat (more), maybe making that coat from Goodwill last yet another year. For the sake of convenience, we'll call these base-level sacrifices "oranges."

So that's the con: Bowles-Simpson, with the rhetoric of  "shared sacrifice" and the policy proposals that "trade" tax increases for spending cuts in this or that ratio*, compares applies to oranges. If Ezra had written "a 1:1 ratio of apples to oranges," everybody would have seen the stupid and/or evil, right out in the open. Apples and oranges are not commensurate! A "sacrifice" where some give up luxuries and others give up necessities is in no way "shared." A marginal sacrifice for the rich is not commensurate to core sacrifices for the rest of us. But the tropes of official Washington carefully brush this reality away.

We're all in this together. That's how we campaigned, and that's who we are. Thank you. -bo
Barack Obama

Well, no. We aren't, you didn't, and you're not.

NOTE * Both legacy parties express their policy preferences in terms of the ratio of taxes to spending, just like Ezra, so both legacy parties -- and  I know this will surprise you -- are in on the con.

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Submitted by Hugh on

It's a new use, or actually two uses, of false equivalence.   The first is that a marginal sacrifice for the rich is equal to core sacrifices to the rest of us.  The second is that the 1% and the 99% are starting from much the same place.  This ignores the massive wealth transfers (looting) to the rich over the last 40 years. 

The result is that minor sacrifices of the rich won't actually reduce their wealth.  It will only slightly reduce the rate of increase in their wealth while the sacrifices expected from the rest of us will reduce what little of our wealth remains.