be achieved or more revenue will have to be raised. If the majority decision is to avoid or minimize tax increases, then the rate of spending growth must be slowed even more, and, eventually, quite dramatically.
Several aspects of the relationship between value choices and budget choices are becoming increasingly clear. First, to bring spending and revenues into alignment over the next two decades and then keep them there will require not merely tactical changes but rethinking the way government is used to achieve the goals Americans consider most important. Explicit and deep debate over these questions is needed to inform choices. If political leaders are to act responsibly without being punished at the polls, the culture and character of the nation’s politics—typically dominated by organized clienteles lobbying to protect or expand narrow benefits—may need to change to represent better the more diffuse public benefits and the lower but perhaps more concentrated costs of a prudent fiscal policy.
Second, unless revenues are raised to a level consistent with spending over the long term, some federal responsibilities on which people place great value eventually will have to be sacrificed or significantly reduced. This change can be achieved in part by shifting resource decisions to state and local governments or to the private sector or by mandating specific use of private resources through federal regulation.
Third, if the nation fails to bring spending and revenues into closer alignment over the long term, then all of the values that are now reflected in federal programs and fiscal policy will be threatened by a financial melt-down. If the nation fails, everyone’s ox may be gored.
Fortunately, perhaps, values do not translate directly or consistently into positions on particular policies, as discussed above. People with similar values may arrive at different positions on questions of policy. And conversely, those with sharply different values may be able to agree or compromise on a particular policy. A proper framing of the problem can help. The hard fiscal choices facing everyone in the country put a premium on rational discussion. There is no magic formula for resolving value and other differences and reaching the consensus and accommodation that are necessary. In Chapter 10 we suggest some process changes that can help. In a democratic society, different values and interests, and differing views of how to pursue them, are eventually compromised or reconciled through healthy argument and bargaining. Ultimately, the nation will have to rely on democratic politics, shaped by responsible leaders, to set a new course.
1. The fiscal gap represents the government’s long-term projected flows of revenues and spending by a single number, which is the present value of future payments to and from the Treasury, discounted for the time value of money to make them comparable with payments today; see Appendix A. The fiscal gap would be zero if it was expected that