I think what is driving people’s pessimism today are two intersecting concerns. The long-term concern is that people intuitively understand that what we need most now is nation-building in America. They understand it by just looking around at our crumbling infrastructure, our sputtering job-creation engines and the latest international education test results that show our peers out-educating us, which means they will eventually out-compete us.
That is why I believe most Americans don’t want a plan for deficit reduction. The Tea Party’s vision is narrow and uninspired. Americans want a plan to make America great again. . . . We need to raise gasoline and carbon taxes to discourage their use and drive the creation of a new clean energy industry, while we cut payroll and corporate taxes to encourage employment and domestic investment. We need to cut Medicare and Social Security entitlements at the same time as we make new investments in infrastructure, schools and government-financed research programs that will spawn the next Google and Intel. We need to finish our work in Iraq, which still has the potential to be a long-term game-changer in the Arab-Muslim world, but we need to get out of Afghanistan — even if it entails risks — because we can’t afford to spend $190 million a day to bring its corrupt warlords from the 15th to the 19th century.
Which is an interesting to do list. I agree about Afghanistan and energy taxes. I think, though, that our work in Iraq is already finished, and whatever good comes out of that experiment is now up to Iraqis. I also don't understand this crazy desire to cut corporate tax rates and Social Security payments; as I keep saying, if our best days were in the past, why not go back to the fiscal policies we had in those glory days, the early 1960s and the late 1990s? (As the AI says to Nemo in The Matrix, "The 1990s -- the height of your civilization.") Tax rates were higher in both those periods of amazing economic growth than in the last stagnant decade. I don't see any way to increase our investments in education and infrastructure without raising taxes, and by saying otherwise Friedman is practicing Republican-style New Math -- just put my priorities first, and the numbers will magically add up!