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Should Baby Boomers Pay Down the National Debt? Atlantic Cover Story Sparks Heated Debate Between Author Michael Kinsley and LBJ School Professor and Economist James K. Galbraith

October 2010 Cover of the AtlanticAUSTIN, Texas-- Sept. 24, 2010-- The October cover story of The Atlantic sparked a heated debate between The Atlantic Senior Editor and Columnist Michael Kinsley and LBJ School Professor and Economist James K. Galbraith over the responsibility and role of the baby boomer generation in paying off the national debt.

In his cover story, "The Least We Can Do," Kinsley characterizes the baby boomer generation as "self-absorbed, self-indulged, and self-loathing... the Baby Boom generation at last has the chance to step out of the so-called Greatest Generation’s historical shadow. Boomers may not have the opportunity to save the world, as their predecessors did, but they can still redeem themselves by saving the American economy from the fiscal mess that they, and their fathers and mothers, are leaving behind."

Kinsley offers a solution to the "fiscal mess" by proposing a tax similar to the estate tax that would generate revenue from money the baby boomer generation leaves behind after death to pay off part of the nation's $14 trillion dollar debt. 

On Sept. 21, The Atlantic published a response to Kinsley's cover story written by Galbraith titled, "Why We Don't Need to Pay Down the National Debt."  

Galbraith rejoinders, "It's true that we have got big economic problems right now. But the budget deficit and the public debt aren't among them. Kinsley just assumes they are, adding to the mountain of confusion already piled onto this topic. I hope his response will take up each of these points and rebut them--if he can."

As far as Kinsley's proposed tax on the money boomers will leave behind after their death, Galbraith says, "...For this system to work, the estate tax must impose high rates on great fortunes. Conversely, it should leave ordinary working people alone. Kinsley's proposal--in fact a terrific boon for a few Boomers like Bill Gates--is the exact opposite of what we need. "

Galbraith's response to Kinsley's original cover story sparked Kinsley to produce a rebuttal of his own titled, "If Deficits Are Totally Harmless, Why Have Any Taxes?" 

"If deficits of any size are harmless, why do we bother to have taxes at all?  Why not let the government spend as much as it wants and borrow the whole amount? Deficits are larger than we could have imagined even a few years ago. If there is some limit, what is that limit if we're not near it now? I'm not against another job-creating stimulus if my economic betters like Jamie Galbraith think it's necessary. I would just like to hear some sort of acknowledgment that it isn't free: that we are digging a hole that someday soon we will have to fill," wrote Kinsley.

The debate continued with Galbraith submitting a second response titled "Spending and Taxes Are the Gas and Break Pedals of the Economy." 

"Why do we need taxes?   We need them, and use them, to control total effective demand. A car has an accelerator and a brake. Spending is the accelerator," wrote Galbraith.  "Taxes are the brake.  They're very useful, but the force of the accelerator has to be greater than the force of the brake, or the car will not move."

The debate continues on the Atlantic web site: