I am not sure, in this economy, someone can do what I did the last ten years. I don’t think the same opportunities exist. But what can be done about it? Will the coming tax breaks help or hurt?

Democracy presumes and enshrines equality. Capitalism not only presumes but requires and produces inequality. How can you have a society based on equality and inequality at the same time? The classic answer is that democracy and capitalism should reign in their own separate “spheres” (philosopher Michael Walzer’s term). As citizens, we are all equal. As players in the economy, we enjoy differing rewards depending on our efforts, talents, or luck.

But how do you prevent power in one from leeching into the other? In various ways, we try to police the border. Capitalism is protected from democracy, to some extent, by provisions of the Constitution that guard individuals against tyranny of the majority?for example, by forbidding the government to take your property without due process of law. Protecting democracy from capitalism is the noble intention, at least, of campaign finance laws that get enacted every couple of decades.

Separation of the spheres also depends on an unspoken deal, a nonaggression pact, between democracy’s political majority and capitalism’s affluent minority. The majority acknowledge that capitalism benefits all of us, even if some benefit a lot more than others. The majority also take comfort in the belief that everyone has at least a shot at scoring big. The affluent minority, meanwhile, acknowledge that their good fortune is at least in part the luck of the draw. They recognize that domestic tranquility, protection from foreign enemies, and other government functions are worth more to people with more at stake. And they retain a tiny yet prudent fear of what beast might be awakened if the fortunate folks get too greedy about protecting and enlarging their good fortune.

That was the deal. Under George W. Bush, though, the deal is breaking down.

Read the rest by Michael Kinsley in Slate Magazine (via rc3.org). Today Paul Krugman in the NYTimes asks and anserers, “The Center on Budget and Policy Priorities points out, this latest tax cut reduces federal revenue as a share of G.D.P. to its lowest level since 1959. That is, federal taxes are now back to what they were in an era when Medicare and Medicaid didn’t exist, and Social Security was still a minor expense. How can we maintain these programs, which have become essential to scores of millions of Americans, at today’s tax rates?”

A great conversation related to all this is taking place over at Oliver Willis’s.