When Thomas Friedman proposed that Americans needed to get used to making some sacrifices if we want to get the deficit under control, I wrote:

What’s the underlying cause of the debt crisis? Certainly Americans buy a lot of crap we don’t need, and on credit too. But consider:

–The decline in real wages in the US
-Obama only proposes to raise taxes on those making over $250,000 a year
-The bailout, at tax payer expense, bailed out the wealthy
–The wealthy routinely avoid paying taxes
-That 23% of the federal budget goes to defense spending (much of which goes to unaccountable private firms)

Who should we be asking to make some sacrifices?

Joseph Stiglitz offers a plan to reduce the U.S deficit he calls an alternative to austerity. Summarized:

1. Increase “high-return” public investments, even if it increases the deficit in the short term. I assume he means infrastructure.
2. Cut military expenditures. He doesn’t say how much.
3. Eliminate corporate welfare.
4. Slightly increase taxes for the top 1% of earners – by about 5%.

Stiglitz concludes with a dismal note:

There’s only one problem: it wouldn’t benefit those at the top, or the corporate and other special interests that have come to dominate America’s policymaking. Its compelling logic is precisely why there is little chance that such a reasonable proposal would ever be adopted.

This sounds about right to me, apart from the lack of specifics in some areas. It’s got me thinking, though – what essentials can the leftists and libertarians agree to? Could something like this be agreed upon:

1. Fix public infrastructure, even if it increases the deficit
2. Cut corporate welfare
3. End tax loop-holes for the rich
4. Reduce defense spending by at least 50%

Could we then agree to disagree about social welfare, tax cuts for everyone except the rich and tax increases for the rich? Would libertarians agree to increase public spending on infrastructure? Would the left be willing to put aside tax increases for the rich, or environmental regulations for the time being?

I’ve been cynical about the potential for a left/libertarian alliance since libertarians nearly universally supported Ron Paul in 2007. But now that Paul is trying to form a left/right alliance himself, perhaps it’s an idea whose time has come.