The current budget negotiations in Washington are completely confounding. The small tax hike the president is proposing is very reasonable, will have no appreciable negative effect on the economy and is something he proposed in every debate and campaign speech prior to the election. The Republican opposition to the hike must be purely ideological — There's no economic reason to oppose it.
Taxes are not punitive or evil in any way. They're just the way government pays for itself. The Grover Norquist anti-tax pledge makes no sense at all; For politicians to vow never to raise taxes is the equivalent of a carpenter pledging never to use a screwdriver.
As for entitlement reform, the debate piles nonsense upon nonsense. I suggest applying payroll taxes to income earned through investments, by simply raising the ceiling from $110,000 to $300,000, which would fully fund both Social Security and Medicare.
Should the budget also be cut? Sure. We don't need military bases in Germany or Japan, and we don't need to support military golf courses in Guam. Cut half a trillion or so from defense, and we're good to go.