The national media has orchestrated a fire storm of criticism at Sen. Jon Kyl and the other members of the congressional Supercommittee, charged with reducing our national debt by $1.2 trillion over the next 10 years. The members' partisanship and unwillingness to compromise cost us another chance to trim the deficit, or so the story line goes.
President Obama plans to use the Supercommittee's failure in his upcoming campaign, hoping to reprise Harry Truman's attacks on a "do-nothing Congress." Maybe that's why he didn't lift a finger (or a phone) to help the Supercommittee reach a resolution.
But we can all take a deep breath. The "failure" wasn't that big a deal. Many of the options before the committee were far worse than doing nothing.
For example, President Obama proposed a half-trillion dollars of immediate government spending coupled with $1.5 trillion in permanent tax hikes. Members of both parties could see that would be the end of any chance to grow our way out of this recession and it was rejected.
On further review, the Supercommittee's lack of results didn't mean that we lost our chance at deficit reduction. The law provided for a default - the "sequester" - in case they could not reach agreement. Had the Supercommittee reached its goal, it would have had about the same economic effect as the sequester's $1.2 trillion in spending cuts.
The sequester was heavy on military cuts - $454 billion - and that's a concern. But the military, like all federal operations, is eventually going to have to do with less anyway. It might not be such a bad thing for us to focus more on national security measures like strategic missile defense. Our costly efforts to be the good cop for the world don't seem to be much appreciated anyway.
There's a lot of squawking going on now about the sequester and even threats to undermine it. The political class still cringes at such "draconian" cuts and the "ultra-conservatives" who propose them.
But here's what you need to know. The sequester is a drop in the bucket compared to what needs to be done to get us back on track after the spending orgy of the past few years.
To give you the idea, the sequester over 10 years cuts less than the current year's deficit. According to former Sen. Phil Gramm, even with the sequester, "total spending in 2013 would still be a whopping $3,582 billion - 32 percent more than projected by the Congressional Budget Office in January 2007." Under current projections, federal spending between 2013 and 2021 will increase $1.6 trillion with the sequester, $1.7 billion without. That hardly justifies the hysterical complaining.
What about taxes, don't they have a role in deficit reduction? That's a tempting option when income-inequality is on the rise and the well-connected continue to score bailouts and subsidies.
One flaw in the "tax the rich" plan is that there just isn't enough in potential taxes to make a dent in the debt problem. All of President Obama's tax proposals together would raise at most $50 billion annually, or about 4 percent of our deficit.
Moreover, it's risky to depend on higher taxes for debt reduction. Take a quick quiz. How much did federal income fall after the "Bush tax cuts for the rich" a decade ago?
Sorry, it's a trick question. Actually, income tax revenues went up substantially, from $1.2 trillion in 2002 to $1.7 trillion in 2006. The Bush tax cuts could more accurately be called the "Bush rate reductions." So if the rate reductions resulted in more income tax paid, why would we assume that the expiration of those rates - due to occur in 2012 - would result in a windfall to the Treasury?
There's one more reason the "failure" of the Supercommittee might be a good thing. The committee's gridlock mirrors the deep philosophical divisions between Americans. It shows we're at a time for choosing and the decision can't be put off much longer.
Like Europe, we have foolishly created a government larger than the private sector can support. We can either get down to the hard work of reducing government and our dependence on it or we can go the way of Greece and the other economic cripples. The next election will be a true watershed.