I hate to pick a fight with the sage of Omaha, but in an otherwise admirable recent New York Times op-ed that offered a new version of his idea for a minimum tax for the wealthy, Warren Buffett embraced (inadvertently, I'm guessing) spending and revenue goals for the federal government that would kill any agenda for American renewal in its cradle.
Because Buffett's voice is so sane and generally credible -- especially with businesspeople and with President Barack Obama -- his proposed targets, if influential, could prove damaging. Buffett argued, "Our government's goal should be to bring in revenues of 18.5 percent of GDP (Gross Domestic Product) and spend about 21 percent of GDP -- levels that have been attained over extended periods in the past and can clearly be reached again."As the math makes clear, this won't stem our budget deficits," he added, but it "will keep America's debt stable in relation to the country's economic output."This is true, but solvency is not an adequate national goal. What we need is an agenda for national renewal. And we need it at a time when our population is aging expensively. We can't do renewal at 21 percent of GDP.Ronald Reagan and George Bush the elder ran the federal government at 22 percent of GDP at a time when America was much younger. We're shortly going to double the number of seniors on Social Security and Medicare. Even if we take steps to slow these programs' growth (and I've supported some reforms that put me to the right of Paul Ryan on this score), and even if we sensibly trim defense and run less of a global empire than we do today, we can't operate government at a smaller share of the economy with twice as many seniors without forcing damaging cuts in the resources we devote to other nonelderly purposes.Yet it's these nonelderly purposes that make up most of what we think of as government -- from national parks to student loans to the FBI to the border patrol and more.And it's these nonelderly investments that (by definition) will build our future. Things such as infrastructure (new electric grid after Hurricane Sandy, anyone?) and research and development (where our once-leading position has eroded).We also need to invest in higher salaries to lure a new generation of teaching talent to the classroom so our schools can one day compete again with the best school systems abroad. Not to mention longer school days and years. Oh, and universal preschool.I'd also add bigger wage subsidies -- via, say, some kind of mega-earned income tax credit -- so that full-time work (and especially in-person service-sector work that can't be offshored) offers a reliable path to the middle class.All this will take federal cash. And that's before we get to the biggie no one is even talking about: shifting the burden of health costs off of corporations and onto public budgets, as virtually every other advanced nation does. Today, business spends around 4 percent of GDP running a big chunk of America's welfare state. Does any CEO think this makes sense in the 21st century? Add it all up, and we're probably talking around 28 percent of GDP as the boomers age.Can we renew an aging America for less? Only if we get our radically inefficient healthcare system to meet international benchmarks of cost-effectiveness, freeing up trillions for other purposes. I'm all for this, as I'm sure Buffett is. But I wouldn't bet our children's future on persuading America's Medical Industrial Complex to join this cause in time to make a big enough difference to the analysis above.We can balance the books at any level of spending and taxes. The question our leaders must ask is why we should prefer one level over another. That can only be answered with a more concrete policy vision to bolster upward mobility, equal opportunity and economic security in a global age. In that spirit, Warren, please have another look. Remember, it's not about solvency; it's about renewal.Matt Miller is a senior fellow at the Center for American Progress and co-host of public radio's Left, Right & Center.Have more to add? News tip? Tell us
