In today’s ’New York Times,’ David Brooks argues that deficits do matter and predicts the emergence of a leader who will take up the issue.
Brooks writes, "There’s going to be another Ross Perot, and this time he’s going to be younger. There’s going to be a millionaire rising out of the country somewhere and he (or she) is going to lead a movement of people who are worried about federal deficits, who are offended by the horrendous burden seniors are placing on the young and who are disgusted by a legislative process that sometimes suggests that the government has lost all capacity for self-control. ... In the past months we have learned that the prescription drug benefit passed last year is not going to cost $400 billion over 10 years. The projections now, over a slightly different period, are that it’s going to cost over $700 billion. And these cost estimates are coming before the program is even operating. They are only going to go up. That means we’re going to be spending the next few months bleeding over budget restraints that might produce savings in the millions, while the new prescription drug benefit will produce spending in the billions. ... We may as well be blunt about the driving force behind all this. The living and well organized are taking money from the weak and the unborn. Over the past decades we have seen a gigantic transfer of wealth from struggling young families and the next generation to members of the AARP. In 1990, 29 percent of federal spending went to seniors; by 2015 roughly half of all government spending will go to those over 65. This prescription drug measure is just part of that great redistribution."
Could it be that the Republican Party will crash and burn trying to manage the entitlement programs of FDR and LBJ?
This is my concern exactly, Professor Craig. All the brave talk about how the GOP can cement itself as the majority party by saving Social Security ignores this fundamental fact: Bush is about to spend enormous political capital on a mess that was created by the Democrats.
This is not a truly Republican agenda, but management of a Democratic agenda gone sour.
While that is arguably a statesmanlike course of action, given that Soc. Sec. is headed for disaster, Republican "control" of the government must, nonetheless, mean more than the management of Democratic disasters like the bloated entitlement state. If our main domestic issue in the ’08 election is that we’re scrambling to manage the entitlement state, we place ourselves in a dangerous and weak position.
The vital goal is to reduce federal spending as a share of national income. Whether you cover new spending with borrowing or new taxes is much less important: either way, it’s a drag on growth and a reduction in personal autonomy.
Um, didn’t Bush create a lot of the problem? He did cut taxes and increase spending! Another thing I don’t understand is how fiscal conservatives could support the war in Iraq. It is extremely expensive and Iraq was not a threat.
Bloc,
Conservatives feel that the money spent on the war is spent on extrememly just cause. You can’t understand that? Some things are more important than money (although personally, I’d just like to make it clear that I don’t support the war in Iraq whatsoever, nor do I agree with the Bush Administration on many an issue :-D).
Of course I understand that some things are more important than money. I just don’t see how the war qualifies for that and it appears you don’t either Matt :)
The environment is one thing I think is more important than money, but I don’t usually here conservatives talk that way.
As a veteran I think it’s disgusting that we have so many homeless veterans and all these politicians like Bush talking about "supporting the troops". Taking care of our troops should be more important than money don’t you think?
There are 93,000 homeless Vietnam veterans, VA officials say.
More Than 40 Percent of Homeless Vets Served in Vietnam, Says Rescue Mission Survey. Gulf War I Vets Already (in 1997) Account for Ten Percent
I am with David Brooks 100%. Deficit spending is worse than taxation because it is not felt as tangibly. Because it is not felt as tangibly it makes government spending seem more attractive to people than it actually is. Jefferson is rolling over in his grave over this deficit. The idea that we will never have to pay for the deficit is foolish. Or is it?
"The trumpery argument that the public debt is no burden because "we owe it to ourselves" is delusive. The Pauls of 1940 do not owe it to themselves. It is the peters of 1970 who owe it to the Pauls of 1940...The Statesmen of 1940 solve their problems by shifting them to the statesmen of 1970. On that date the statesmen of 1940 will either be dead or elder statesmen glorying in their wonderful achievement, social security." (from Von Mises, Human Action)
Actually the statemen of 1970 shifted the burden to the statesmen of 2000... And a Republican president claimed that social security represents the american ideal of freedom in action.
No matter what anyone tells you: There is no such thing as a free lunch, or a freedom lunch for that matter.
In the long run we are all dead as the Keynesians say, but the Austrians will be at the funeral to say: I told you so.
I can’t resist adding some more:
Because of the possibility of deficit spending there are no checks and ballances. After all what is popular? Tax cuts and more government spending. What is unpopular? Tax increases and cutting spending. Now suppose you told me that our elected officials have lost all capacity for self-control. Yeah, can you blame them?
When the goverment can sell bonds on the open market and the fed can turn around and buy them up... I don’t know... You figure it out, it isn’t rocket science.(ok, sometimes it is)
This sort of thing has to be taken into account when we praise things like the Marshall Plan, or Bretton Woods... Churchill gave up the gold standard for World War 2 that was reasonable...
I never took the time to really study Hamilton vs. Jefferson on this, but it would be interesting if conservatives brought the founders in on this one. What would the founders think of government financed by debt?