Aren't You a Closet Republican? Aren't You a Closet Democrat?

Life is not black and white, but it certainly simplifies things to presume that's the case. There is safety in numbers, and with two opposing sides, remaining neutral provides protection from neither group. Today we have the reds and the blues asking, it seems, but one question. Are you with us or against us? The two sides are united by one thing -- their conviction that they are right and the other side is wrong.

If the reds argue for X, the blues will argue for not X. What X is doesn't seem to matter. What matters is that "We're right and you're wrong." Indeed, the need to disagree is so strong among the parties that whenever one side flips its position from X to not X, the other side flips from not X to X. Thus, we've had Republicans over the years push for tax hikes and Democrats push for tax cuts as well as the opposite.

Back in Emperor Justinian's day, in the early part of the 6th Century AD, the two parties weren't the reds and the blues, but the greens and the blues. Their disagreements were much more violent, with riots routinely breaking out in Constantinople after the chariot races. Whether the blues and greens really disagreed about anything fundamental isn't clear. But they certainly found things to fight over, including remarkably narrow theological issues.

Our country doesn't have the luxury for senseless internal fights. This isn't World War II, but we do have a national emergency -- a national economic emergency. We need to get people back to work, to fix our ailing, aged economic institutions, to start saving and investing, and to stop passing the generational buck -- leaving our bills for our children to pay.

In advocating solutions to our problems, I've been called red by the blues and blue by the reds. To both Republicans and Democrats, the notion that I or anyone else might belong to neither of their two groups -- might be truly independent -- appears incomprehensible.

Let me provide an example. On August 6, 2011, I was interviewed by National Public Radio about my estimate that the U.S. fiscal gap was $211 trillions. The fiscal gap is a present value measure (the value as of the present) of the shortfall between projected government spending commitments (including servicing the official debt) and projected tax revenues. The fiscal gap is not a brand new concept. We economists have been talking about it and calculating it for over 30 years. The President's Budget includes a fiscal gap calculation based on a 50-year horizon. The Congressional Budget Office also produces fiscal gap calculations based on a 50-year horizon. I used the CBO's figures to produce an infinite-horizon fiscal gap because, it turns out, any finite horizon fiscal gap is sensitive to how the government labels its receipts and payments.

Anyway, my two minute interview was attacked by Dean Baker (http://www.npr.org/blogs/ombudsman/2011/08/25/139951614/you-picked-him-a...) -- a co-founder of the Washington-based Center for Economic and Policy Research as "cesspool journalism."

To quote Baker (http://www.cepr.net/index.php/blogs/beat-the-press/national-public-radio...)

"This (NPR's having me on their show) is an extraordinary example of cesspool journalism that would even embarrass Fox News. The piece gets from the debt number normally reported to $211 trillion by doing some unusual accounting (following a methodology developed by Boston University economist Lawrence Kotlikoff) and also hiding assumptions about exploding private sector health care costs. First, the calculation adds up all the Social Security and Medicare benefits that current workers are projected to receive and then assumes that no new workers pay taxes into the system."

Now Baker and I have talked in the past, quite cordially. He had the option of contacting me to discuss my fiscal gap calculation. But he didn't. Had he done so, he'd have learned that I formed my calculation based entirely on CBO projections (their June 21, 2011 Alternative Fiscal Scenario), that the infinite horizon accounting is quite standard (It's used, for example, in Table BIV6 of the annual Social Security Trustees Report) and that these projections do assume new workers pay taxes into the system and do not include hidden assumptions about exploding healthcare costs. They include the CBO's published assumptions about exploding healthcare costs.

The point I'm making is that Baker went after me because he thinks I have a hidden agenda -- to eliminate Social Security and Medicare and let older people fend for themselves. That's completely untrue as I believe my Purple Social Plan and Purple Health Plan (see www.thepurplesocialsecurityplan.org and www.thepurplehealthplan.org) make clear. There are very good reasons why the government needs to help organize saving for old age and health insurance at all ages. My plans produce what's needed in what I believe to be the most transparent, cost-efficient, as well as generationally and inter-generationally equitable manner. But Baker saw red and he branded me red.

NPR branded me red as well in defending their choosing to interview me. I've been on NPR multiple times over the years, but their defense for having me on the air on August 6th was provided by Senior NPR Editor Rick Holter who stated:

"Kotlikoff came to our attention because of his focus on the long-term "fiscal gap" between expected revenues and benefits promised to Americans. His bona fides are solidly conservative: He was the chief economist for President Reagan's economic advisory council. He also is unusual among conservative economic voices: He says the country must cut budgets and entitlement programs, but he also says taxes must be raised."

Mr. Hotler also failed to call me to discuss Baker's concerns and learn who I was. He says I'm solidly conservative and that I was the chief economist for the Council of Economic Advisors (CEA) under President Reagan. That's wrong on both counts. First, I was not the Chairman of the CEA. I was one of about 10 senior staff economists. Above us were two Members of the Council and the Chairman, who was Murray Weidenbaum during the nine months I served on the Council. Mr. Holter presumed that because I worked at the CEA in the Reagan Administration, I must be a Republican and because I'm concerned that the country is going broke, I must be a Republican with good conservative credentials.

I went to work in Washington because any young public finance economist needs to spend some time seeing how the government operates and taking a crack at making a contribution to economic policymaking. I went to work for the country, not for the President. But I was and am very proud to have worked there and for President Reagan. Yet I didn't vote for President Reagan. But, before a red reader suggests I have solid liberal bona fides for not voting for President Reagan, let me point out that I have not always voted Democratic.

I frankly don't know and don't care what "conservative" or "liberal" mean. And I don't fancy being pigeonholed by those who want to categorize, rather than analyze, what I'm saying. The truth is I care about getting people back to work; getting our fiscal house in order now, not in some far off distant future; making Wall Street safe for Main Street; providing a modern version of Social Security that's fully funded, has individual accounts, but entails no involvement by Wall Street; providing a basic health insurance plan to all Americans in a manner that retains private provision and competition and doesn't drive our country broke; properly pricing dirty energy so we leave a cleaner environment to our kids and lower the risk of potentially catastrophic climate change; fixing our third-rate education system; improving our immigration process and focusing on immigrants who can help the country grow; and last, but really first, protecting the country by engaging our military in much more strategically advantageous ways and only when our national security is truly at stake.

best, Larry