Is it time for Democrats to become as fiscally irresponsible as Republicans?
In the postwar era, the consensus among both Republican and Democratic administrations has been that, except during recessions, the federal government ought to aim to run a surplus, Brad DeLong writes in a new column for Project Syndicate (via Mark Thoma). (Things didn't work out so well in the Reagan years, but few Reagan advisers really meant to run deficits that big.) Continues DeLong:
[O]nly George W. Bush's economic advisers have broken with this consensus. ... [T]heir failings do pose a dilemma for Democratic deficit-hawk economists trying to determine what good economic policies would be should Barack Obama become president. Those of us who served in the Clinton administration and worked hard to put America's finances in order and turn deficits into surpluses are keenly aware that, after eight years of the George W. Bush administration, things look worse than when we started back in 1993. All of our work was undone by our successors in their quest to win the class war by making America's income distribution more unequal.
A chain is only as strong as its weakest link, and it seems pointless to work to strengthen the Democratic links of the chain of fiscal advice when the Republican links are not just weak but absent. Political advisers to future Democratic administrations may argue that the only way to tie the Republicans' hands and keep them from launching another wealth-polarizing offensive is to widen the deficit enough that even they are scared of it.
I can't really fault the political reasoning here. But the prospect does kinda scare me.
Also, it is very interesting to see someone hurl the phrase "class war" from the other side of the partisan divide.
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1
That strikes me as... an incredibly bad idea. I think you can, and should, fault that reasoning. It's literally like saying "to save the budget we have to destroy the budget". Substitute the word "village" for "budget" and you should hopefully see the problem with that line of reasoning.
Also, Clinton only balanced the budget because federal tax receipts absolutely exploded during his time in office due the '90s internet-fueled economic boom. When the Clinton projections first came out, they were widely heckled for assuming radical, unprecedented growth in the economy.. just like Reagan and Bush I's advisers predicted to make their figures balance long term.
These guys don't know any more about budgets than the Republican economics guys, they lucked into a massive, non-repeatable tech driven boom and decided that made them super smart. To quote a Bush II put-down "They were born on third and thought they hit a triple." (Reached on an error would probably be more accurate, but you get the idea.)
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2
Well, Clinton did luck out with the tech boom, but he also raised taxes, which certainly helped.
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3
How about this question: should the media become as disinterested in sane fiscal policy as Republican are.
None of this would have happened without you guys pretending that Bush's economic plan made sense.
It's naive to think this is isolated either. Broderism has made *all* serious policy discussion politically ineffective if not impossible. This is just one manifestation of that.
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TomT: May I refer you to "Here We Go Again: Supply-side economics is back! But this is not 1981--and that's why Bush's tax plans don't quite cut it," Fortune, May 12, 2003? By, uh, me.
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5
Justin,
Wouldn't an effective strategy for the Dems be to fund infrastracture improvements? That is roads, bridges, overpasses, tunnels, mass transit, etc.
These are capital expenditures in constituent districts, where bi-partisan support is likely(vote for my earmark and I'll vote for yours).
This is a way to widen the deficit, but increase union construction jobs and put some blue collar Americans and illegal immigrants back to work.
Besides, isn't not like a bridge or tunnel is likely to collapse, right? (See Minnesota or Boston)
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6
Did you say anything about it in 2000 during the campaign, Justin?
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I was in London then, covering the Euro business scene for Fortune, so no.
More to the point, in 2000 a tax cut accompanied by no reductions in spending wasn't a so clearly a bad idea. It's obvious enough to us now that tax receipts were gonna plummet as soon as the stock market bubble burst. But it was far from obvious then.
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Oh, and as for Andy from Massachusetts' point: Definitely, it would make sense--both politically and economically, for the Dems to push for big infrastructure projects.
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