Beyond the well-known budget and trade deficits, the nation suffers from a "third deficit," its failure to invest in people and public works such as roads, bridges, water systems and airports, a study reported Saturday.
The Center for Community Change estimated the nation's so-called third deficit at $130 billion and recommended tax increases to pay the bill. Failure to make such public investments, the report said, is undermining the ability of the nation to solve such problems as poverty, health care and education."We're constantly hearing about budget and trade deficits," said Pablo Eisenberg, center president. "But the most important deficit for our future is the deficiency of investment in solving problems that are undermining us economically and politically.
"Unfortunately, no one issues monthly updates of this deficit," he added. "Few politicans talk about it. The media doesn't cover it. Most commentators don't denounce it.
"Yet it keeps growing, year after year, like a leak in a roof that goes unnoticed until the ceiling collapses."
The new study, "America's Third Deficit: Too Little Investment in People and Infrastructure," examined 61 other studies, surveys and reports to estimate the extent of the nation's social problems and the cost of seriously addressing those problems, focusing on national issues that require investment by the federal government.
It concluded, for example, that the federal government needs to spend an additional $85.6 billion to deal with social problems such as the high level of poverty, inadequate education and training, the lack of affordable housing and to increase access to health services and long-term health care.
Additionally, it found the federal government needs to spend at least another $40.9 billion annually to maintain and improve the nation's physical plant - its system of highways, bridges, airports, prisons, water and sewer systems - and to clean up hazardous waste sites.
Pointedly, the study did not include the money needed to bail out the savings and loan industry.
Center officials said there estimates were conservative, noting they did not include the Pepper Commission's recommendation that $42.8 billion be spent on long-term health care or the National Council on Public Works' recommendation that all spending on public works be doubled.
"Many people will be able to cite needs and studies we did not include or question ones we did," said Woodrow Ginsburg, the center's research director. "But our purpose was not to determine absolutely the size of our third deficit but simply to get more people to think about its size."
Eisenberg says the nation is given regular glimpses of the needs - "if we read to Page 20 of our newspapers" - but few "ever try to pull together these studies and comment on what they mean to our future."
"Most of us would say we need to do something about these problems, but for the most part we don't because we've been told for years that we don't have the resources," he said.
"But as the report shows, a $5 trillion economy that has 65,000 people who make more than $1 million a year does have the resources."
It calls for a return to a progressive tax system in which those who make more money are taxed at higher rates and notes that taxes in the United States are lower than all but two of 22 industrialized nations.
Others of the 20 specific suggestions advanced by the study included a number of other changes in the tax code, including boosting the top corporate tax rate, adding a tax bracket for those with incomes over $500,000, changes in the way foreign taxes paid by U.S. corporations abroad are applied to their U.S. taxes, limiting the mortgage interest deduction to $15,000 a couple, and lowering the inheritance tax exclusion to $300,000.