As President Obama and congressional Republicans continue to square off over raising the federal debt ceiling, with little progress to show for it, the country could use some out-of-the-box, neither-left-nor-right thinking on its mounting debt and sluggish economic recovery. Thankfully, three op-eds this morning offer just that. Let's take a look at what they recommend:
- Legalize Internet Gambling and Marijuana Writing in The Wall Street Journal, Jared Polis, a Democratic congressman from Colorado, suggests four ways to raise billions of dollars in revenue without raising taxes: 1) require illegal immigrants to "get right with the law" and pay back-taxes and fees; 2) legalize and regulate online gambling; 3) legalize, regulate, and reduce federal taxes on marijuana; and 4) offer a one-year amnesty program for federal tax evaders. All these ideas, Polis says, should "be on the table, along with spending cuts, if we are to break free of the rhetorical shackles that prevent cutting the deficit."
- Tackle Household Debt While conservatives tend to blame the weak economy on government spending and liberals on insufficient stimulus, William Galston explains at The New Republic,University of Chicago professor Amir Sufi blames household debt (particularly mortgage debt), which he says is "in worse condition than at any other point in history since the Great Depression." Galston supports Sufi's claim with additional data and adds "if employers won't hire until consumer demand increases, and if demand won't increase until household balance sheets recover, then policymakers should focus on accelerating that recovery" by getting more aggressive about writing down mortgage debt.
- Focus on Job Creation and Debt Reduction Peter Orszag, the former director of the Office of Management and Budget and the Congressional Budget Office, suggests in a Bloomberg column that the CBO, his former institution, has issued overly optimistic forecasts on the unemployment rate and the budget deficit. "The history of economies recovering from severe financial distress," Orszag writes, suggests that we may face a "hard slog" ahead, where "the unemployment rate will remain stuck at elevated levels for years, not quarters. And sluggish growth, in turn, will mean larger budget deficits." What's Orszag's solution? A "combination of more aggressive action to bolster the job market now and much more deficit reduction enacted now to take effect in a few years."