Good article, but the problem is that there is no political will for higher taxes to fund the social programs that Sachs and Krugman support, thus the only option on the left is deficit.



The larger problem, temporarily forgotten, is that extremely large unfunded liabilities loom on the horizon as baby boomers retire in record numbers, so deficits will start moving up around the turn of the decade and will continue to do so for an extended period.



The fundamental flaw in both Sachs' and Krugman's progressive dreams is that there is somehow, somewhere a large pot of money, either through debt and/or taxes, to fund these programs. There isn't.



Now that the economy is recovering at a reasonably healthy pace and we're approaching full employment with reasonable deficits, we should seriously think about radically restructuring government, how we spend almost 40% of GDP, to attain desirable social goals as well as putting existing programs on a sustainable long-term footing. The appropriate refrain during the crisis was that we shouldn't worry about the long-term deficits, but should work towards getting the economic engines running again and then tackle the long-term problems. While there were mistakes and missteps on both sides (repealing the Bush tax cuts on the wealthy and the sequester and other budget cutting didn't push us into the abyss), then is now.



Now is the time we start addressing longer term structural imbalances (ie: unfunded entitlements), but, perhaps more importantly, we should re-examine government programs across the board to spend the money that is available to achieve desirable social goals.



Clearly chronic poverty, particularly among certain groups, which is related to education and crime and violence, is a core issue as is a middle class that remains stuck in neutral, which is related to post-secondary education.



The U.S. government directly spends $800 billion a year on anti-poverty programs, not to mention additional amounts spent on education and other programs, and yet very little is actually accomplished in ending poverty, but instead, it could be argued, that many of these programs are in fact pro-poverty, with 72% of poor children born into single parent, largely females families, supported by the government, while males come of age into lives of drugs, crime and jail. While some make it out, the vast majority don't.



We know that education is the key to getting out, but, as with the many third rails of American politics, the left is in bed with the public sector unions, so major structural reforms of the educational system are all but impossible.



While still early, and further progress is needed, after Katrina, the New Orleans school system shifted from Public Schools to Charter Schools and High School graduation rates doubled from about 1/3 to about 2/3rds, which is major "progress." While not a panacea, and not applicable everywhere (taking out the underperforming districts, U.S. schools are actually globally competitive), improving schools in poorer districts, by whatever means with the available (as opposed to imaginary, funds) should be a national priority. Ideally, we should take all of the money government at all levels spends on anti-poverty programs and education and apply it towards the single goal of creating effective and efficient programs that actually lead people out of poverty and turns them into productive, self-sufficient members of society.



This, however, becomes impossible, because "public" education is a cornerstone of the modern "liberal" state, and public sector unions are a key interest group in the "liberal" coalition, so on issues of the existing state, the "progressives" become one of the most "conservative," reactionary forces in society.



Whether from the Krugmanite or the Sachian wing, the solution to every problem is throwing more money at the same policies that aren't working. In the circular logic of the left, the reason these policies aren't working is because we're not spending enough money, and the reason we're not spending enough money is because the "evil" right won't let us. The core of the right wing argument is, of course, the government isn't the solution, but the problem (except for defense), but perhaps if government problems were actually shown to be effective, there would be more support for these programs. Many billionaires, who are regularly demonized by the unionists, Krugmanites and the left, are voluntarily dedicating large portions of their fortunes towards solving social problems, like our broken educational system, because they have no faith that government can solve these problems, but instead see it as a black hole.



while in the best of all possible worlds, there would be unlimited resources to solve all social problems, in the real world, economic decisions at all levels are about making difficult choices about how to allocate inherently limited resources. Over time, markets are very good, if sometimes brutal, in efficiently and effectively allocating resources and producing aggregate improvements in well being. But markets also lead to unequal outcomes and there are a range of public goods that markets don't provide, hence the need for the state. The problem is that the state, unlike markets, doesn't have an endogenous mechanism for effectively and efficiently providing social goods and has internal and external special interests whose individual well being is in conflict with the social goods that the state is intending to provide. Thus, over time, while continuously desiring more resources, the state becomes increasingly ineffective and inefficient in providing social goods.



A truly "progressive" social vision for the 21st century would be based on prioritizing the most important public goods, such is actually ending poverty and improving educational outcomes among others, and then use modern research techniques and technology (taking it out of the endless circular ideological arguments on both sides) to create effective (achieving the best outcomes for the highest number) and efficient (getting the most bang for the available buck) government programs.