Let’s stipulate that the scandal involving the Internal Revenue Service’s targeting of conservative nonprofit groups portrays government as if drawn in caricature — an almost Keystone Kops-style comedy of errors on the part of low-level staffers, with a vein of possible political bias.

Of course, the matter needs to be fully investigated, those responsible need to be held accountable and procedures need to be put in place to ensure that nothing like this can happen again.

But let’s also remember what the I.R.S. brouhaha is not. Unlike the abuse of the I.R.S. by President Richard M. Nixon, in this case there’s no evidence that anyone in the White House had any involvement in — nor even any knowledge of — what was going on within the agency’s Tax Exempt and Government Entities Division.

In the post-Watergate years, legislation was passed to protect the I.R.S. against political meddling from the executive branch. That included — unusually — a five-year term for the I.R.S. commissioner.

Until his departure in November 2012, the I.R.S. commissioner was Douglas Shulman, an appointee of President George W. Bush. (Yesterday, the acting commissioner, Steven Miller, who was a career civil servant, resigned under pressure.)

And finally, note that when Lois Lerner, the head of the Tax Exempt and Government Entities Division, learned that applications were being singled out if they contained words like “Tea Party” in their names, she ordered that the practice be stopped. Regrettably, a bureaucratic ant colony succeeded in circumventing her instruction for several months.

By way of background, the decision in 2010 to target groups with certain words in their names did not come out of nowhere. That same year, the Supreme Court decision in the Citizens United case substantially liberalized rules around political contributions, stimulating the formation of many activist groups.

In the year ended Sept. 30, 2010, the division received 1,741 applications from “social welfare organizations” requesting tax-exempt status. Two years later, the figure was 2,774. Meanwhile, the staff of the division tasked with reviewing these applications was reduced as part of a series of budget reductions imposed on the I.R.S. by anti-tax forces.

A far higher proportion of the new applicants wanted to pursue a conservative agenda than a liberal agenda. So without trying to defend the indefensible profiling, it wouldn’t be that shocking if low-level staff members were simply, but stupidly, trying to find an efficient way to sift through the avalanche of applications.

One of the bigger ironies about the I.R.S. imbroglio is that it had nothing to do with taxes. These newly formed entities didn’t seek 501(c)(4) status to avoid taxes — these groups don’t earn profits and therefore don’t pay any taxes, regardless of their status. The important benefit that came from achieving 501(c)(4) status was freedom from having to disclose the names of any of their donors.

That’s right, what the I.R.S. was really deciding in these cases is which organizations have to disclose their funders and which don’t. And what it was trying to do — however dumbly it went about it — was to reduce the abuse of the campaign-finance rules, not the tax laws.

Without 501(c)(4) status, these groups would have had to organize as what are known colloquially as “super PACs.” While this would have afforded them greater flexibility to overtly support candidates, the names of their donors would have to be made public.

In theory, 501(c)(4)’s are supposed to be social welfare organizations. But the rules are vague and are often stretched.

Some groups have interpreted the regulations as permitting them to spend as much as 49 percent of their funds directly advocating for or attacking the election of candidates, maintaining all the while the secrecy of their donors’ names.

Perhaps most incredibly, a 501(c)(4) can even transfer a portion of its funds to a super PAC, which can — thanks in part to the Citizens United decision — freely support candidates for office

Karl Rove established just such a structure by pairing a 501(c)(4) organization (Crossroads GPS) with a super PAC (American Crossroads). By some accounts he raised as much as $300 million for these entities. And yet there’s no evidence that the I.R.S. ever questioned the 501(c)(4) status granted to Crossroads GPS.

So let’s, by all means, find the wrongdoers at the I.R.S. and punish them. But the biggest take-away from the I.R.S. mess should be that our campaign-finance system is in desperate need of overhaul.

Originally published in the New York Times

EUROPE’S economic problems are growing steadily worse, with unemployment in parts of the Continent now above the level reached in the United States during the Great Depression.

Meanwhile, policy makers dither over solutions. Last week, the European Central Bank cut interest rates by a meager quarter of a percentage point, akin to giving two aspirin to a patient with pneumonia. Meanwhile, pressure is growing to ease the emphasis on austerity and to allow larger budget deficits.

If it were only that simple.

Properly coupled with other new policies, fiscal stimulus can help, but on its own it is just an inadequate palliative.

The problems of the euro zone are not some routine cyclical downturn that can be rectified by traditional macroeconomic policy; they are deep structural flaws in both the design of the common currency and the economic policies of many of its members.

Most fundamentally, the design of the euro was ill conceived. A disparate group of 17 countries, ranging from the German powerhouse to weaklings like Greece, should never have been joined in a single currency without integrating their other economic policies.

As a consequence, while Germany grew ever more efficient, many other members allowed the cheap borrowing rates that accompanied the euro to lull them into complacency. Budget deficits expanded, wages rose rapidly and speculation in real estate ran rampant. Meanwhile, excessive regulation of business and labor made needed restructuring nearly impossible.

Take autos. The European automobiles industry resembles that of the United States, circa 2009: too many factories employing too many workers, able to make more cars than the market can absorb. And, doing it too inefficiently. A Fiat autoworker in Poland produces three times as many cars as a Fiat employee in Italy and is paid one-third as much. And yet, achieving an American-style restructuring in Europe is impossible. Closing a single plant, even in Germany, is an expensive and often unsuccessful effort.

When Peugeot ran into liquidity problems last fall, the French government provided up to seven billion euros in loan guarantees, but only if Peugeot spared some of the 8,000 jobs on its cutting board. Saving unproductive jobs is not a recipe for economic prosperity.

In contrast, there’s Spain, where a more flexible labor market has led to higher productivity and competitiveness and in turn, to expanded production by a raft of automakers, including Nissan, Ford, Renault and Volkswagen.

Spain remains plagued by high unemployment and recession. But better competitiveness has led to rising exports and a workable base for future expansion.

Ireland has done even better in improving its competitiveness, and as a result its exports have boomed, growth has resumed and its double-digit unemployment rate has begun to tick down.

But two of the largest euro zone economies — Italy and France — seem paralyzed. For example, Italy, under the previous prime minister, Mario Monti, made modest reforms like higher retirement ages and more freedom for employers to shed workers. While the reforms did not go far enough, even Mr. Monti’s small steps were soon watered down. He lost the most recent election, and his successor has been conspicuously silent about the needed structural changes.

Competitiveness is not the only problem. Banks, because of their own weak balance sheets and a fear of more losses, have been wary of lending to small and medium-size businesses, and when they do it’s at a high interest rate. In Italy, where 80 percent of workers are employed by small or medium-size firms, borrowing costs are around 6 percent, compared with 3.5 percent in Germany. Nothing significant has been done to address this problem.

To be fair, the euro zone has been taking small steps toward the greater integration that is required. A banking union and single regulatory framework are under development. And discussions are under way over a deal in which the austerity regime would be relaxed for certain countries, including France, in return for structural reforms.

But incrementalism is an insufficient response. Europe should pursue full economic integration, much like the United States did in 1789, after the failed Articles of Confederation experiment. That would involve harmonized regulatory policies and a shared central government budget that would provide extra funds to troubled countries, just as America does for weaker states.

On its face, Friday’s announcement that the nation’s gross domestic product expanded at a 2.5 percent annual rate in the first quarter was good news, following as it did an only marginally positive result for the previous three-month period.

But, alas, that rosy headline figure masked disturbing signs: an economy whose recovery has failed to match the pace of past expansions may now be facing a deceleration in its own modest growth rate.

Start with the G.D.P. figures, which can be misleading because of temporary fluctuations in the inventories maintained by businesses. Adjusted for those changes, the economy’s annualized growth rate shows a steady deceleration over the past three quarters, from 2.4 percent to 1.9 percent to 1.5 percent.

That’s on top of a highly disappointing employment report for March, when only 88,000 new jobs were created, compared with an average of 197,000 for the previous six months.

And other economic measures — ranging from retail sales to the index of leading economic indicators — have begun to display softness and even declines. All told, at a minimum, we have entered yet another spring slowdown.

Perhaps it will prove transitory, as the pauses of the past three years have been. But worrisome signs suggest that this time may, indeed, be different.

For one thing, hourly wages, after adjustment for inflation, haven’t budged in more than three years. That’s unusual during an ostensible period of recovery, particularly from such a vicious recession.

Without higher incomes, consumers can’t expand their purchases (at least not without dipping into their savings).

Meanwhile, Washington’s budget wars have thus far produced a fistful of undesirable policy changes. Instead of thoughtful reforms — particularly to programs like Medicare and Social Security — to begin to bring the nation’s long-term debt under control, Congress has adopted a series of meat-ax measures.

While that has shrunk the federal deficit significantly — this year, the deficit is likely to come in at around $775 billion, compared with $1.1 trillion in the previous year — the sudden contraction is likely to slow the economy further, cutting the growth in America’s economic output this year by about 1.5 percentage points. Using basic yardsticks, that measures out to 1.5 million fewer jobs.

Finally, the weak world economy has knocked one American strategy for ratcheting up growth — faster increases in exports — badly off the rails. Just three years ago, United States exports were expanding at a 27 percent annual rate; today they are barely growing, and sales to Europe’s hard-hit economies are declining.

To be sure, unlike Europe, where countries have faced double-dip recessions (and, in some cases, the prospect of a triple-dip), the United States is highly unlikely to experience a similar fate.

Our economy still exhibits some signs of strength, like the gathering recovery in housing construction and home prices. That has been aided by a strong stock market, which has rebuilt the value of retirement accounts and other investments.

But without rising incomes (and with mortgage financing still constrained), Americans’ ability to buy new homes will remain limited.

Meanwhile, the stock market recovery has been built on the shaky pilings of higher corporate profitability that has resulted far more from cutting costs than from growing revenues. That’s not sustainable.

The challenges listed above, of course, would be substantial by themselves.

But the most worrisome aspect of our current economic doldrums is that we can’t expect any of the factors weighing on it to be self-correcting. For example, the lack of wage growth owes much to the continuing effects of globalization, a trend that has benefited the United States as a whole while hurting many workers.

Nor are the prospects bright for renewed expansion in Europe, or for a resumption of the meteoric growth rates we once saw in emerging market nations, particularly in China.

Were Washington functional, policy makers could significantly ameliorate these effects. First and foremost, Congress could adopt budget policies that would accomplish more thoughtful, more gradual — and yet, ultimately, more substantial — deficit reduction.

Instead of deep, across-the-board cuts in many important investment programs, ranging from infrastructure to research and development, we need to protect those initiatives while adjusting our social welfare programs to live within our means and protect the truly needy.

To address the effects of globalization, so much more can be done in education and training to prepare workers for the skilled jobs that play better to America’s strengths.

Congress would be doing the American people a service if it came together to tackle these more consequential questions, and not just the problem of air-traffic delays.

President Obama’s new budget, released on Wednesday, is stuffed with constructive ideas. It bravely outlines concrete steps to begin fixing Social Security. It flouts today’s all-deficit-cutting, all-the-time mentality with important proposals for fresh spending on infrastructure and universal prekindergarten education. It includes detailed plans to close tax loopholes and raise needed revenues from the wealthy.

But in one critical area — long-term deficit reduction — the president has offered less than not only the House Republican budget but also the proposal by the Senate Democrats. Over a 10-year horizon, his deficit-reduction plan doesn’t have enough, well, deficit reduction.

That shortfall illustrates the challenge of budget making in a constrained world: in formulating his budget, the president was trying to simultaneously hold spending cuts at sensible levels, provide funding for his important new initiatives and confine tax increases nearly entirely to the wealthy.

The consequence of respecting those goals is illustrated in the graph on deficit reduction plans. The president proposes to raise about as much new revenue as the Senate Democratic plan, but wants to spend $520 billion more over the next 10 years.

(Of course, neither the president nor Senator Patty Murray, the chairman of the Senate Budget Committee, want to go near the plans of Representative Paul Ryan, the House budget chairman, to eviscerate federal spending.)

Not shown in this chart — but important to note — is that the Senate offering comes with a big asterisk. As with the president’s proposal, the Senate version assumes the government will get approximately $1 trillion of new revenue over the next 10 years. But unlike Mr. Obama, who outlines specific proposals for new taxes, the Senate doesn’t specify where its trillion would come from — making its income statement a bit more magic than math.

The New York Times

The chart on cuts details the differences in spending plans, most important the president’s desire to replace the $1 trillion of terribly constructed forced budget cuts known as sequestration with more surgical reductions of $174 billion in spending on discretionary programs, including defense.

Mr. Obama also wants $241 billion of new spending in the short-term, to try to get our sluggish economy moving again. Included in that total is $50 billion for roads and other badly needed infrastructure programs.

That’s all great — there’s nothing inconsistent about doing more to help the economy in the short run while still addressing the long run challenges.

The New York Times

But the graphic on future debt ratios shows the all-in consequences of the president’s plan. He would allow the country’s ratio of debt to gross domestic product — budget wonks’ favorite measure of our fiscal health — to rise over the next few years by more than would even occur by continuing current policies.

After 2015, the president’s plan would cause the ratio to decline slowly, getting back to approximately its current level by 2023. In contrast, the Murray plan would result in a debt to G.D.P. ratio that would be three percentage points lower.

That may not sound like much, but by 2023, with our economy projected to be $25.9 trillion a year, it’s a difference of $674 billion of debt.

By getting the debt to G.D.P. ratio back to 73 percent by 2023, the Obama budget meets the minimum goal of any sensible fiscal strategy. However, it leaves no margin for error — no margin for a Congress that finds it easy to avoid cutting spending and raising taxes, no margin for the possibility that the economy doesn’t achieve the assumed growth levels over the next decade.

The New York Times

All told, the president should be commended for producing a fully detailed set of proposals that both address the short-term needs of a slow economy and begin to tackle the long-term challenges posed by an aging society that increasingly relies on underfunded Medicare and Social Security programs.

But we shouldn’t kid ourselves: we will need to make more tough choices — tougher choices than we are inclined to make today — if we are to avoid burdening future generations with massive unfunded obligations.