TheDC: What are the practical implications of our high deficit? Is it too late to do anything about it?
TS: It is never too late. The question is how likely it is that what is done will make things better for us. The high deficit can be [a big deal]. It depends on whether it is high in absolute numbers or high relative to the gross domestic product. Out current deficit is high in both those respects and it shows every prospect of growing higher. We already have the highest deficit that has ever been created in peace time, not only absolutely, but relative to the Gross National Product (GNP), in other words our GNP is much higher, but even relative to that it is a run away.
The big problem of course is the deficit can not be considered in isolation. The question is, what are you going to do about it? And if what you are going to do about it is simply raise the tax rates, then you are off to a whole new set of problems that mean that recovery is unlikely to occur anytime soon.
TheDC: What do you see as the best way to responsibly reduce government spending?
TS: Politicians, whenever they want to weasel out of some big spending problem, they say, “we’ll eliminate waste, fraud, and abuse.” Of course they never do it. But if they did eliminate waste, fraud and abuse, the government would shrink to a fraction of its size. There are whole departments that represent nothing but waste, fraud, and abuse. I would think for example the Department of Labor, Health and Human Services, you could run through a whole list of them. So the question is not whether there are a lot of things that are expendable from the standpoint of the public interest, the question is whether anyone has the political will to take on the special interests — who are going to defend to the death their particular branch of the waste, fraud, and abuse.