Tuesday, November 22, 2011

First, Do No Harm

Primum non nocere is one of the principal precepts of medical ethics, "First, do no harm." What would happen if Congress followed this maxim? Many have predicted economic mayhem if the Super Committee fails to reach agreement and sequestration is triggered, but Panderbear wonders, why? According to James Horney of the Center on Budget and Policy Priorities, if Congress went home and did nothing at all it would lead to $7.1 trillion in deficit reduction in the next 10 years. The chart, based upon Congressional Budget Office (CBO) data, shows just how effective a "do no harm" approach by Congress to the deficit combined with President Obama's PAYGO rules would be. The deficit would be reduct to a small fraction of GDP within 3 years.

Congress Doing Nothing Reduces Deficits

The following breakdown is from Ezra Klein's 11/18/2011 blog at The Washington Post:
  • $3.3 trillion from letting temporary income and estate tax cuts expire;
  • $0.8 trillion from allowing other temporary tax cuts to expire on schedule;
  • $0.3 trillion from letting cuts in Medicare physician reimbursements take effect;
  • $0.7 trillion from letting temporary increase in AMT exemption expire;
  • $1.2 trillion from letting sequestration take effect; and
  • $0.9 trillion in lower interest payments on the debt.

To be sure following this "do no harm" approach would be painful, but Panderbear thinks it would be a lot less painful than the draconian cuts to social programs with no increases in revenues that Republicans have demanded. When you're in a hole, stop digging. Sometimes that's enough.

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