Editore"s Note
Tilting at Windmills

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January 22, 2007
By: Kevin Drum

PAYGO....Amitai Etzioni, after recounting the recent history of Democratic fiscal responsibility followed by Republican splurges, asks:

Does it make sense for the Democrats to "act responsibly" only to provide funds to be expended by the next Republican administrations on its constituencies?

That is a very, very hard question. The best answer I can summon up at the moment is "maybe not."

Kevin Drum 3:25 PM Permalink | Trackbacks | Comments (79)

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Comments

Delong & his technocrat buddies discussed this a couple weeks ago.

Posted by: SP on January 22, 2007 at 3:36 PM | PERMALINK

Kevin Drum: That is a very, very hard question. The best answer I can summon up at the moment is "maybe not."

The best answer I can come up with is "definitely yes". Call me naive, but perhaps some voters will respond well to the idea of responsible gov't (don't forget to tell people about it, loud and clear).

Posted by: alex on January 22, 2007 at 3:37 PM | PERMALINK

Another answer might be yes, and we should start telling the public, loud and long, that things have changed; we are now the party of fiscal responsibility and the Republicans are the party that is mortgaging the country's future.

Posted by: JHM on January 22, 2007 at 3:41 PM | PERMALINK

What's the alternative to acting responsibly?

If dems don't act responsible, what happens to the non-affluent?

Posted by: A different matt on January 22, 2007 at 3:45 PM | PERMALINK

Hi Kevin,

You're suggesting that Democrats put themwelves down on Republicans' level -- bad idea.

If Democrats act responsibly, it shouldn't take too many election cycles for a pattern to emerge that voters would notice, in spite of Republican spin and lying. (And not just fiscally, Democrats acting responsibly in all ways -- I know, a lot to ask!)

Posted by: isabelle on January 22, 2007 at 3:46 PM | PERMALINK

Does it make sense for the Democrats to "act responsibly" only to provide funds to be expended by the next Republican administrations on its constituencies?

Kevin, I see you support saying you'll cut the deficit during the election but raising the deficit after you're in power. Hypocrite!

Al
..

Posted by: urpewqas on January 22, 2007 at 3:47 PM | PERMALINK

Let's just make sure there are no future Republican administrations. We know most of their bag of tricks by now, don't we? For the next 20 years we can point at this administration and its Congress to keep people from voting Republican, just like they got to power by freaking people out about the hippies.

Posted by: Alan on January 22, 2007 at 3:51 PM | PERMALINK

One of the parties has to be filled with grownups.

Of course there will be enormous pressure to forgo "pay go" inorder to accomplish some important program or other. Can Democrats act responsibly and resist? That is the real question.

Posted by: Ron Byers on January 22, 2007 at 3:51 PM | PERMALINK

Pay-go doesn't dig us out of the giant deficit hole that the Republicans dug. It only keeps us from digging the hole any deeper. So we can have pay-go and still not provide any more funds for the GOP to squander.

Posted by: Emily on January 22, 2007 at 3:55 PM | PERMALINK

Well now that's about as hypcritical a response as you could possibly give, Kevin. That's embarrassing.

Posted by: Matt on January 22, 2007 at 3:55 PM | PERMALINK


"Does it make sense for the Democrats to 'act responsibly' only to provide funds to be expended by the next Republican administrations on its constituencies?"

No, my precious, it does not. The ONLY thing that makes sense for the Dems to do is to reintroduce a Constitutional amendment (such as Clinton opposed) requiring a big supermajority to run a deficit -- but with real teeth in it -- and themselves refuse to balance the budget until it is ratified. Just as they should treat the Congressional Republicans exactly the same way the Republicans treated them, until the latter agree to help pass a Constitutional amendment permanently mandating appropriate rules for the behavior of Congress (which, as with so many other things, the Framers didn't do because -- and only because -- they totally failed to foresee the rise of political parties). Otherwise we'll be going through these Lucy-and-the-football routines -- or, where cycles of deficit binging and purging are concerned, maybe "fiscal bulimia" would be a better name for it -- until Doomsday.

Posted by: Bruce Moomaw on January 22, 2007 at 3:55 PM | PERMALINK

What the Democrats definitely don't need to do is assume that the next president will be a Republican.

Self-fulfilling prophecies, &c.

Posted by: Martin on January 22, 2007 at 3:57 PM | PERMALINK

Over the past 26 years, the US has suffered through an A-B-A-B field study. Under Republicans (that would be A)--s**t happens. Under Democrats (B)--things get better. (At least, we hope this round of Democratic leadership will do better.) The hope is that, after the major FUBAR that is the Bush WH, 65% of Americans will never again trust Republican with the nation's finances or believe for one second the sanctimonious lies they use to peddle their misdeeds.

Posted by: PTate in FR on January 22, 2007 at 3:57 PM | PERMALINK

Here is another way to look at it, Repubs are goona run huge deficits regardless of what you do, so just be responsible and do the right thing.

Posted by: Eric on January 22, 2007 at 4:02 PM | PERMALINK

Act responsible:

Raise taxes on the rich to pay off their Iraqi war debt.

If they don't like it,
offer them free transport to Iraq.


Posted by: ROTFLMLiberalAO on January 22, 2007 at 4:02 PM | PERMALINK

Given the demographic changes of the United States, the Democrats will be the one dominate party in the futre.

Now, all of the wonk wannabes would do all the rest of us a favor if they could point of a one party state that practices fiscal restraint. From what I have read the blue states pay much higher taxes yet still run deficits. Didn't Democratic governor of California Gray Daivs run up huge deficits are the balanced budgets of Pete Wilson?

Posted by: superdestroyer on January 22, 2007 at 4:08 PM | PERMALINK

If the Democrats implement PAYGO and then allow Republicans to block any tax increases, agree to enlarge the army and keep funding the Iraq war, and make up the difference by cutting social services, then there is little point to electing them. Fixing New Orleans and fixing health care have to be done, and are more important than deficit reduction.

Posted by: Joe Buck on January 22, 2007 at 4:11 PM | PERMALINK

Paul Krugman explored this in a recent New York Times column. (I know it's a policy here to not link to or make much mention of things behind a -- Boo! Hiss! -- paid subscription wall.)

He concluded, as I recall, that the Democrats had best not run a surplus: far too tempting for a future Republican administration to plunder (in the same way a well-run corporation sitting on loads of cash presents an irresistibly plump target for a leveraged buyout, now that I think of it).

Acting responsibly with a pay-as-you-go plan would be fine, but we shouldn't let that principle stand in the way of important policy matters, such as addressing global warming or national health care.

Unilateral disarmament is not the way to go.

Posted by: Krugman's Alter Ego on January 22, 2007 at 4:11 PM | PERMALINK

I recommend the Democratic Congress provide billions of dollars in funds to me. I will not spend it on intangible goods and services like the Republicans do, so it will be a good economic stimulus.

Posted by: Brojo on January 22, 2007 at 4:14 PM | PERMALINK

Bruce Moomaw on January 22, 2007 at 3:55 PM NAILS it, like a Chinese ASAT missile.

I also think the Dems need to pass a public campaign financing (ban all private financing) AMENDMENT.

Get rid of the bribery - and the easily bribed go find something better to do, like torture puppies. Maybe we'll be lucky and they'll move to Mexico.

Posted by: Extradite Rumsfeld on January 22, 2007 at 4:14 PM | PERMALINK

superdestroyer; NO!

Posted by: Thomas3.6 1/2 on January 22, 2007 at 4:15 PM | PERMALINK

Maybe another good law would be to cut off donations from people who have donated wrongfully to canidates.Kinda like arrest the john instead of the prostitute.

Posted by: Thomas3.6 1/2 on January 22, 2007 at 4:19 PM | PERMALINK


Posted by: isabelle:

"Hi Kevin,

You're suggesting that Democrats put themwelves down on Republicans' level -- bad idea.

If Democrats act responsibly, it shouldn't take too many election cycles for a pattern to emerge that voters would notice, in spite of Republican spin and lying. (And not just fiscally, Democrats acting responsibly in all ways -- I know, a lot to ask!)"

Just in case you haven't noticed yet, please consult the history of the USA, from 1980-2006.
Ever since 'supply side economics', the GOP has consistently been the party of spending like there's no tomorrow.

Posted by: Barry on January 22, 2007 at 4:24 PM | PERMALINK

From what I have read the blue states pay much higher taxes yet still run deficits

Almost all states have balanced-budget provisions in their constitutions. The only exceptions are Vermont and one other state-- and vermont balanced its budget under Howard Dean, even though it didn't need to.

Posted by: Tyro on January 22, 2007 at 4:24 PM | PERMALINK

That is a very, very hard question. The best answer I can summon up at the moment is "maybe not."

Oh, for Pete's sake, Kevin. You remember our buddy tbrosz -- as faith-based a Bush apologist as there ever was. Over and over he was confronted with with Democratic preferences for more spending, balanced with tax revenue, and Republican preferences for more spending run up on the national credit card, and asked if that didn't make the Democrats inherently more fiscally responsible than Republicans.

tbrosz was anything but dumb -- blinkered and misguided, but not dumb -- and the best he could come up with in response ( paraphrase here) was that the Democrats love taxes so much that they'll keep on raising them -- a self-evidently phony statement, given that the GOP has made raising taxes tantamount to political suicide -- Bush even insists on paying for his war with a tax cut! -- and that the payment-deferred "free goodies for our constituents!" policies of the GOP are also electorially self-reinforcing.

The GOP simply doesn't have a defense for their irresponsibile policies except to scream "tax increases! Booga booga!" That's red meat for the, ah, rugged individialists in their base, but the persistent deficits racked up by Reagan and Bush the Lesser -- and the resulting damage to the economy* -- stinks on ice for the rest of the electorate, who long for fiscal responsibility for a damn change.

Like national security, fiscal responsibility now goes with only one party: The Democrats.

*Cue rdw and his loony rants in 3...2...1...

Posted by: Gregory on January 22, 2007 at 4:27 PM | PERMALINK
From what I have read the blue states pay much higher taxes yet still run deficits

Many states run practical deficits despite some kind of balanced budget provisions in their Constitution, but the blue/red split isn't significant in the overall state tax rate or the size of the deficit in proportion to the overall state economy.

Republican partisans occasionally trade on popular mythology (i.e., "Taxachussetts", despite the fact that Masschussetts is near the middle of the pack in terms of state taxes overall) or cherry pick particular taxes in on or two individual states to make it appear otherwise, though.

Posted by: cmdicely on January 22, 2007 at 4:28 PM | PERMALINK

The solution, of course, is to make sure the next administration is Democratic.

Posted by: PB on January 22, 2007 at 4:35 PM | PERMALINK

We're in too big a budget hole with too many problems left for the next crew to fix to talk seriously about balancing the budget any time soon. What we probably can do is show progress, with decreasing deficits while still spending on needed programs.

Posted by: CJColucci on January 22, 2007 at 4:39 PM | PERMALINK
That is a very, very hard question.

But also a very dumb one. Democrats need to go beyond acting responsibly when they are in charge to actually do a better job of:

1) Communicating how they are doing that and how important it is, and why, and
2) Pointing out when Republicans are trying to act irresponsibly, and the consequences.

The problem has always been that Democrats, when the Republicans get a tiny bit of momentum, have too often rolled over and, if not actively supported, only feebly and quietly resisted Republican irresponsibility (often enough because they hoped to feed at the hands of the beneficiaries of that irresponsible largesse, too.)

People are busy. If the Democrats don't do the job of vigorously opposing and publicizing bad Republican ideas, no one is going to notice and punish the Republicans until events have made it impossible not to see the problem and who its coming from. If you want to nip it in the bud, you need more vigorous Democratic activists and politicians.

Avoiding acting responsibly because it might actually make some resources available, which the Republicans might somehow sneak into power and implement bad policies with, is dumb. You stop that by shining a light on bad Republican policies, not by continuing to waste resources so that they have nothing to left to abuse if they come to power.

Posted by: cmdicely on January 22, 2007 at 4:45 PM | PERMALINK

You know, it may just happen that the general public will accept the fact that you don't raise tax revenue by cutting taxes. Have faith that voters will reject the Republicun "logic" regarding taxes and spending because it's simply hair-brained.

Posted by: CT on January 22, 2007 at 4:47 PM | PERMALINK

Does it make sense for the Democrats to "act responsibly" only to provide funds to be expended by the next Republican administrations on its constituencies?

The question is not hard so much as disgusting.

Democrats should act responsibly, all the while reminding the public of the kind of Republican behavior we are recovering from. That’s part of the responsibility. Same as teaching your children not to be like crack-head Uncle George, rather, be more like Uncle Al.

Posted by: little ole jim from red country on January 22, 2007 at 4:48 PM | PERMALINK

"another answer might be yes,ect... ismortgaging the countries future." before long the arabs and the chinese wont have to invade they will just buy are debt hense owning the country any way.

Posted by: mr maki mmmkaayyy on January 22, 2007 at 4:49 PM | PERMALINK

Fiscal responsibility, while crucial, actually takes second place to accountability and plain old fairness.

The world needs to know about the fact that this administration has proven the old adage..

"power corrupts, absolutely" or "What we have now (in the USA 2007) is a government for the rich and nothing but the rich so help us god."

It makes no sense to not collect royalties on energy leases on federal lands.

It makes no sense to be fighting a "war" that currently costs upwards of 8-10 billion dollars a month.

It makes no sense to squeeze the middle-class and the poorer while the greedy folks continue to make out like bandits (you think the Katrina recovery is less important than Iraq?)

It makes no sense to have seemingly forgotten what a "government by the people for the people" really entails, and requires of us all.

So yeah, fiscal responsibility is a good idea. But holding the repugnacans accountable for their unfathomable greed is probably more important.

We lament the state of our nation's schools, yet we build prisons at an alarming rate and send our illiterate children off to die in Iraq!

Posted by: Tom Nicholson on January 22, 2007 at 4:50 PM | PERMALINK
Have faith that voters will reject the Republicun "logic" regarding taxes and spending because it's simply hair-brained.

Don't have too much "faith" that voters will do that on their own, instead, work to make it happen; if the Republican message is the only thing they hear, they may accept it for lack of alternatives: its happened too many times before when the Democratic opposition to hare-brained Republican ideas was largely absent or silent.

Posted by: cmdicely on January 22, 2007 at 4:50 PM | PERMALINK
Fiscal responsibility, while crucial, actually takes second place to accountability and plain old fairness.

Since they don't in any way conflict, I don't see any reason to rank them in importance. Indeed, I'd say that the three require each other absolutely.

Posted by: cmdicely on January 22, 2007 at 4:54 PM | PERMALINK

Tuesday's State of the Union Address should offer Americans compelling viewing. After the GOP's electoral disaster in November and the resounding thud that greeted the "surge" in Iraq, the 2007 SOTU can be said to officially mark the last throes of the Bush presidency.

In anticipation of tomorrow night's presidential flight of fantasy, here are 10 things to look for in the 2007 State of the Union:

1. An Unhealthy Vision
2. Surge Protector
3. Faux Iraq-9/11 Link Redux
4. Sacrificial Sham
5. Culture of Life Redux
6. Energy Shortage
7. Warming to Global Warming
8. The Spend and Not Tax Conservative
9. The New Bipartisanship: The Democratic Deficit
10. Laura Bush: Gang Banger

For the details, see:
"SOTU Preview: 10 Things to Watch."

Posted by: AngryOne on January 22, 2007 at 5:02 PM | PERMALINK

bye the way the repugs do the same every time they are in office. this has been the same since i was a kid so why should it change now. repugs need to start showing moral responsability as well as finacial. i feel bad for the dems cause when ever they do get the office it takes there whole term just to fix the horrible situations left by the former repugs. then they get blamed for not doing anything new their term hense no re-election.

Posted by: mr maki mmmkaayyy on January 22, 2007 at 5:03 PM | PERMALINK

How about giving us something directly AS you raise the tax for it: Cover Everyone, Medicare for all.

Just raise the Medicare tax enough to make it a "gold-plated" deal for Everyone and send us all cards.

Once everyone sees the joy of no co-pays or deductibles or premiums -- We might all be amazed at how much faith we have in our leaders to make other decisions.

Posted by: katiebird on January 22, 2007 at 5:09 PM | PERMALINK

Part of why it would be worthwhile to actually reform healthcare without too much worry about the cost of the transition.

If we actually reform the system and go to a single-payer, it will save us money in the long run. Most changes, however, cost in the short run. Transition costs would include retraining the armies of administration people who currently keep people from entering the healthcare system; who say what treatments are covered, and who work for doctors to do billing and call the insurers to find out if a particular treatment is covered.

There would doubtless be kinks that would need working out.

This is worth fighting for, and worth turning our backs on the deficit in the short term in order to bring our system up to the basic standards of cost, quality, and access that the rest of the industrialized world enjoys.

Posted by: Kristen Hannum on January 22, 2007 at 5:27 PM | PERMALINK

Kevin, the question you address is an echo of a common conservative (no, not that conservative, the real one) idea, expressed variously, but perhaps best as:

"Any government that's strong enough to give the people everything they want is a government that's strong enough to take it away."

The conservative's question would be why should they work so hard to limit government's power when they are in charge when their opponents will expand that power during their turn.

Yet conservatives with integrity (yeah, like I said, the old ones) would still try to limit government power when in charge.

And as it is with the echo, so should it be in the main, that progressives and liberals with integrity should still try to create and maintain a functioning, sustainable government that serves its citizens.

Posted by: mere mortal on January 22, 2007 at 5:30 PM | PERMALINK

Sheesh, Kevin, Democrats aren't looking at the impact on *future* Republican Administrations, they're looking at *the* *CURRENT* *one* (and probably more than a few Blue Dogs who might let themselves be swayed by Bush to support more tax cuts and more un-paid-for spending - *that* might be sort of helpful and important here, too).

That's the one they're taking aim at. Remember, the first rule of eating an elephant is one bite at a time.

(or is it that the first rule of eating an elephant is that you don't talk about eating an elephant?)

Posted by: Chris on January 22, 2007 at 5:39 PM | PERMALINK

Put it in a lock box.

Posted by: Gary Sugar on January 22, 2007 at 5:42 PM | PERMALINK

What he seems to be saying is that Starve the Beast works albeit with a political lag.

Posted by: pgl on January 22, 2007 at 5:59 PM | PERMALINK

mere mortal: Yet conservatives with integrity (yeah, like I said, the old ones) would still try to limit government power when in charge.

Old? Try dead.

Posted by: alex on January 22, 2007 at 6:09 PM | PERMALINK

What he seems to be saying is that Starve the Beast works albeit with a political lag.
Posted by: pgl on January 22, 2007 at 5:59 PM | PERMALINK

Unfortunately, we're not talking about a beast.

We're talking about our countrymen, with real needs. Fellow Americans. I'm not talking about welfare or even public education. I'm not even talking about ROADS. The degree to which they've bankrupted this nation, particularly with regard to Iraq, has severely degraded the posture of our National Security.

I mean - look at the situation in Iraq. What happens if the Neocons are right, and we back out, and there's a problem with the oil supply, like a shooting war between Saudi Arabia and Iran over Iraq? I know this sounds pretty farfetched, but is the US really in a position to stop this if it were to happen?

We were 6 years ago.

Do any of us have any fucking clue how the US would fight a war with 60 days of oil in the SPR, trillions in debt, no domestic manufacturing base, and a Rumsfeldian outsourced military?

We'd have to resort to nukes.

And how much use to anyone is radioactive oil?

Posted by: Extradite Rumsfeld on January 22, 2007 at 6:11 PM | PERMALINK

Extradite Rumsfeld: Do any of us have any fucking clue how the US would fight a war with 60 days of oil in the SPR, trillions in debt, no domestic manufacturing base, and a Rumsfeldian outsourced military?

Do you think those things are relevant? (BTW, you forgot to mention a worn out and disgusted military).

And how much use to anyone is radioactive oil?

It's a dual-use fuel.

Posted by: alex on January 22, 2007 at 6:16 PM | PERMALINK

Normally, Kevin would have dropped in to give "one lucky reader" a response to a question or point that person raised in the first 1/2 dozen or so posts.

What I'd say in his stead is that he probably wasn't saying the Democrats should be as reckless as the Republicans, but rather they shouldn't be targeting debt, as opposed to deficit, reduction as a major policy. Better to use whatever room your fiscal responsibility has created to implement your vision of government, while holding the line on government debt.

If that means a little extra spending in some areas (universal health care anyone?) to offset the cuts in pork and other non-essentials (quite likely defense, agriculture, entitlements - prescription drug reform)while repealing the Bush tax cuts and providing middle and lower income tax relief, so be it.

But why stifle your agenda just to give the opposition the freedom it needs to run amok? In truth, left-leaning parties in power in the 90's everywhere in the West were seen as cozying up to the center and center-right, seemingly losing sight of what they were supposed to stand for. The Democrats fit this pattern perfectly. That was due to the fiscal crisis that made those liberal governments in the West accept limited agendas, as they were wedded to deficit and, more importantly, debt reduction during those years. In the US, which doesn't have a Parliamentary system, the Republican Congress obviously had an impact on Clinton's agenda as well.

It is forced austerity that denies government the freedom to implement its vision. Balance the books and improve your society with the rest. Otherwise you run the risk of never showing Americans what you want to do once the pain has receded, because the Republicans will never hand the country over in good shape.

Posted by: Dismayed Liberal on January 22, 2007 at 6:31 PM | PERMALINK

(BTW, you forgot to mention a worn out and disgusted military).

I think that would turn itself right around when $200/bbl oil guts the economy, and nobody has any jobs.

Really - it couldn't get much worse, because with the infrastructure in place, we've always been in a position in the past to bribe a strongman or two. But now, with anarchy and God's Soldiers sitting on the oil fields, and no infrastructure, and no way to put an infrastructure there, and no way to protect it, the oil can very easily stay in the ground.

Had we invested in alternatives back in the 1980's while we were prosperous, we'd be in a much better position than China and Russia when the oil stopped flowing.

Instead, we spent it on viagra and Iraq. And now we have no way to spend our way to an energy-independent future, and no way to remain prosperous with an energy-dependent future.

Posted by: Extradite Rumsfeld on January 22, 2007 at 6:38 PM | PERMALINK

Does it make sense for the Democrats to "act responsibly" only to provide funds to be expended by the next Republican administrations on its constituencies?

Yes.

It is not yet known what will happen if the Democrats bring fiscal responsibility, but things will be worse, most likely, if they do not. If they bring in a balanced budget, they can take credit and, in future elections, attempt to persuade voters (with Reagan and Bush as examples) that the Republicans will ruin things.

Posted by: calibantwo on January 22, 2007 at 6:40 PM | PERMALINK

Well, excuse me for living, but just how is it fiscally responsible to have several trillion sunk in physical plant and not available for use in some way? Most of you would never do that with a car or a house- most of us buy our houses and cars on credit and make money doing that because we save on rent and make a living partly because we can drive to work. The same priniciple applies to the student loans.

Nor is this a new thing. For several hundred years the nation best able to run a funded debt has been the most powerful, for its size, in the world.

What the Democrats need to be doing is insisting that the national ability to incur a funded debt be used only for projects that are money makers. For example, solar power= big savings in the future, while aircraft carriers to ensure our access to oil= big expenses in the future.

And frankly, we're getting into the 11th inning here. We obviously need to make major investments in renewable energy, mass transit, and energy-efficient housing on transit lines, not to mention investing in the education of young people so we'll have skilled people to build the new stuff that is needed.

The balanced budget talk is the stuff of blowhards who talk the talk but would never walk the walk. Or, even if they would, who cares? In your personal or business life you don't let large amounts of money sit around doing nothing, in the form of bridges or trucks, unless you have a darn good reason. It's time for the Dems to stop talking about balancing the budget, and start talking about responsible investment for the future.

Posted by: serial catowner on January 22, 2007 at 6:48 PM | PERMALINK

Wait a second.

The context for Krugman/Etzioni bitching about the Repubs squandering Democratic surpluses on their supporters is that to generate those surpluses, we had to deny our base what we had promised them. Clinton's focus on lowering deficits as a way to reduce interest rates meant that while he lifted the economy for everyone, he didn't do diddly to advance traditional Democratic concerns.

Repubs have no such qualms. Krugman/Etzioni are not suggesting Dems behave as irresponsibly as Repubs. Just that we need to take care of our base and if that means pursuing fiscal policies the repubs don't like then so be it.

Posted by: Auto on January 22, 2007 at 6:50 PM | PERMALINK

Its not fiscally responsible to save money so that others will spend it irresponsibly. Better to invest the money in infrastructure.(which the Republicans wont spend money on anyways.)

Posted by: jimmy on January 22, 2007 at 6:51 PM | PERMALINK

Yeah, we've gone over this at Krugman's instigation.
I still say we should take the opportiunity to reinforce the Democratic Party's record for sound fiscal management.

That's not to say we need to slam on the brakes and send everyone flying through the windshield (if you'll excuse the pre-seatbelt & air-bag metaphor.)

Posted by: BroD on January 22, 2007 at 6:56 PM | PERMALINK

And speaking of fiscal responsibility, when did the Dems show that?

Have they moved to end the Dug Wars, saving us $40 billion a year, plus the savings you get when marijuana grown at home replaces a $300/month course of Dromolol? Have they cut the military budget, because, gosh darn it, 8000 nukes and 13 carrier groups is enough already? Have they made sure that former prisoners (see Drug War, above) can get jobs and pay taxes when they leave prison?

As for Clinton the wonderworker, his magic involved a housing bubble that has made every house in the state unaffordable, and an economy where a person with a college degree and ten years of experience can't get a job. I've had about all of that kind of prosperity that I can take.

The Dems have walked hand-in-hand with Republicans down the primrose path of cutting social programs, wandering way to the right of Republicans like Dwight Eisenhower, who presided over huge federal funding to local school districts, and hardly blinked an eye at the proposal to spend several trillion building an interstate system over the course of forty years.

When I see Dems complaining about real budget-busters like the Drug Wars, any talk about "austerity" will be a lot more believable.

Posted by: serial catowner on January 22, 2007 at 7:20 PM | PERMALINK

serial catowner:

Nobody "saves money" by buying a house, and NOBODY saves money by buying a car. Keep running up debt and one day the credit card companies DO say no.

In fact, in our case (the US) our largest creditor--China--is probably not too far from saying just that.

Posted by: Globalize THIS! on January 22, 2007 at 7:28 PM | PERMALINK

"If they bring in a balanced budget, they can take credit ..."

Nobody in the history of government has ever gotten credit for a balanced budget. So forget that.

Posted by: David in NY on January 22, 2007 at 7:31 PM | PERMALINK

Count me in among the vacillating.

If PAYGO means raising taxes on wealth and on the top 10%, yes. If it means cutting poor people off Medicaid, reducing food stamps and the like, hell no!!!

The problem with the discipline and profligacy cycle is the the rich benefit from Republican profligacy while Democratic disclipline falls on the backs of the poor -- in order to get the votes from the incidentally liberal like Lieberman.

Posted by: RuthAlice Anderson on January 22, 2007 at 7:43 PM | PERMALINK

Okay...maybe we won't try to balance the budget in a term. But something has to be done about the deficit to GDP ratio. Its running over 6% when you include raiding the Social Security surplus. I don't see why repealing some of the Bush tax cuts would be inappropriate. Nor do I see how cutting the defense budget could hurt, or be particularly challenging to do, if the Democrats are committed to ending the war in Iraq. That would leave at least 200 billion (without checking the math) sloshing around. I'd like to think that not every penny of that would go to other spending priorities when the budget is running a $500B deficit.

And I love the idea of killing the drug war, both home and abroad. The 40 billion should be amongst the first things cut. And not only is it a money-saver, but its a money-maker as well, as the profit-for-risk associated with black market trade can be replaced by taxation. Too bad it hadn't happened a decade ago. Worse still is that its likely to continue for decades more.

Posted by: Dismayed Liberal on January 22, 2007 at 7:57 PM | PERMALINK

Maybe I'm wrong but isn't the greatest cause of the Federal deficit the Bush tax cuts? It seems to me that revoking those would go a long way to putting the country back on the path to fiscal solvency while allowing the Dems to enact universal health care in stages. Insure all kids under 12 first year, 18 and under year 4, etc.

I think the real point is not spending taxes on creating a universal health care system is the irresponsible thing to do.

Posted by: D. on January 22, 2007 at 7:59 PM | PERMALINK

David in NY: Nobody in the history of government has ever gotten credit for a balanced budget.

I sympathize.

However, Gore in 2000 did not even try to take credit for a balanced budget, and he did not say why his economic policies would continue to pay down the accumulated debt, and that would be good for the country and a reason to vote for him. Instead, he promised more federal intrusion in trade, a clear departure from Clinton's policies. That was too bad, because one of the strong themes at the Democratic convention was the success of the Clinton economic policies. Instead of building on that success, Gore ran away from it.

Now to the future: if the Democrats announce that they are going to try to balance the budget, and if they then succeed in balancing the budget, then they can take credit for it. If they subsequently act as though balancing the budget was a bad idea, or act as though they forgot that they did it, then they will not get credit for it.

Posted by: calibantwo on January 22, 2007 at 8:25 PM | PERMALINK

Wait a minute- you don't think buying a house saves money? You don't think your landlord has a mortgage that you are paying, plus whatever he bills you to form his profit?

Buy a house and the mortgage interest is deductible from your income. Rent a house, and pay tax on the money you spend paying your landlord's interest- which he gets to deduct as a business expense.

Or, in the larger scheme of things, companies issue bonds to build factories that slowly pay off the bonds, and a little extra. Governments issue bonds to build roads that also pay off slowly (if used in moderation). The government built the Grand Coulee, and Boeing has made airplanes for 60 years using that cheap electricity. One of the few things we seem to be able to sell to China.

It's not rocket science. They should teach it in high school.

Posted by: serial catowner on January 22, 2007 at 8:25 PM | PERMALINK

I think you're probably right, but I didn't want to overstate my case, as it was unsubstantiated. I think repealing all of the Bush tax cuts would put close to 1/2 trillion back in the governement's coffers.

And yes, I think creating a universal health care system should be the number 2 priority of the US government, just behind the environment.

Posted by: Dismayed Liberal on January 22, 2007 at 8:27 PM | PERMALINK

Other than me, when Bush was campaigning in 1999 and 2000 (and then the first year of his pushing tax cuts) and saying, "Gotta get the surplus out of Washington or the politicians will spend it," where was the progressives' response, "We have a looming social security and medicare crisis that must be addressed - What better time than now, with the surplus that was created, in part, by Clinton's dismantling of social safety nets (it hurt many people, but we agreed because we had been promised 'with a surplus we will be in a better, stronger position to get it all restored, and more'). And what about saving for a rainy day?"

That rainy day sure came. Rainy day PLUS.

We got hosed. By Clinton and by Republicans.

And now we have a Congress controlled by politicians playing as if oblivion isn't right around the corner. If Bush(Cheney) manages to be talked out of lighting the 'Iran'-match, then the coming-and-certain economic crash will do it. There really is no way around the fact that millions of Americans are going to be homeless and desperate within the next few years.

The debt that Bush and Republicans got us into was deliberate - spend as big and as fast as you can, borrow as much as you can, get it into the pockets of your cronies and leave it to Americans citizens, ordinary people and their children/grandchildren to pay off in years to come. It's "Save the Tiger."

Of course 'paygo' is a non-starter.

Posted by: Maeven on January 22, 2007 at 8:28 PM | PERMALINK

...creating a universal health care system...

Creating a single payer universal health care system.

Posted by: Maeven on January 22, 2007 at 8:30 PM | PERMALINK

Auto: Wait a second.

Do the Democrats believe that the high debts are bad for the poor and middle class, or don't they? If the deficits are bad for the poor and middle class, then reducing/ending them is good for the poor and middle class, even if nothing else changes.

Posted by: calibantwo on January 22, 2007 at 8:30 PM | PERMALINK

"Wait a minute- you don't think buying a house saves money? You don't think your landlord has a mortgage that you are paying, plus whatever he bills you to form his profit?"

Well... actually today many landlords aren't making money if the property isn't paid for, but that situation is historically atypical. Renting out houses in most major cities right now looses money on rent vs cost and the profit is to be made through capital appreciation, aka speculation.

Taking out a loan to buy a car, however, is how people spend more money on a car than they can save up. Unlike land cars wear out. At which point many people take out another loan and buy another car. They would almost certaintly be better off buying a cheaper car they don't need a loan for and starting to save up for the next car. The only difference between taking out a loan to buy a car and running a credit card balance to buy clothes is that the interest rates are lower.

Posted by: jefff on January 22, 2007 at 8:41 PM | PERMALINK

Dismayed Liberal: something has to be done about the deficit to GDP ratio. Its running over 6% when you include raiding the Social Security surplus.

No, it's around 3.5% (including the SocSec raiding). That's still pretty bad, but we haven't seen 6% since the days of Ronald "don't tax but spend" Reagan.

If you want something over 6%, try the trade deficit. As much as I think the federal budget deficit is inexcusable, it amazes me that people constantly talk about it while ignoring the trade (current account) deficit, which is about twice as bad. It also puts the US at greater risk because we're subject to foreign intervention (forget nukes to destroy the US, just issue a sell order).

Posted by: alex on January 22, 2007 at 8:41 PM | PERMALINK

economistsview.typepad.com:
"By spending money well, Democrats can improve Americans' lives and, more broadly, offer a demonstration of the benefits of good government."
"In the long run, something will have to be done about the deficit. But given the state of our politics, now is not the time." (from Paul Krugman)

More from Paul Krugman, whom I love-- it was Ben Bernacke, current Fed Chairman, who hired Krugman at Princeton-- great minds and all--Krugman says "the 2nd president Bush squandered the surplus on tax cuts that favored the wealthy then plunged the budget deep...even as he took the country into a disasterous war.
Brad Delong--what we did "was to enable GWB's right wing class war--his push for greater after-tax inequity.

So--no kidding--the president, reigning over the wasteful earmark spending of his Republican Congress and Senate all these years--will want to show earnest he is with government spending this year--as a legislative agenda. I CALL BULLSHIT
It is a ruse to create problems for Democrats.

Posted by: consider wisely always on January 22, 2007 at 8:47 PM | PERMALINK

Back when Bush was campaigning in 1999 and 2000, with "Gotta get the surplus out of Washington or else the politicians will spend it," I think I was the only one writing on the net, "Hold your horses, sonny, we've got some shoring up of social security and medicare to do with those surpluses." ("...not to mention that quaint old idea of 'saving for a rainy day'")

That was to be the pay-off for letting Clinton part-out FDR's & LBJ's legacies to the people, real Americans. If we were good little boy-and-girl progressives, we'd get it all back (and more) if we let Clinton give Gingrich welfare reform.

We got hosed by Clinton and the Republicans.

What Bush did, with the help of a Republican-controlled Congress and some remarkably blinded Democrats, was to fulfill the conservatives' wet-dream of destroying popular and beneficial programs for the public benefit by driving us into the greatest debt the world has ever known. The programs can't continue if there is no money to fund them. In our names, Bush has borrowed the greatest amount of money ever, funneled it into his and his cronies' pockets (privatization schemes, war profiteering), leaving poor, working and middle income Americans and our children, for generations to come, paying it off. That's just the interest. We won't be stimulating the economy, purchasing anything but the bare necessities. We won't be able to - we'll be competing for money to borrow, and losing to institutional borrowers.

We are standing on the precipice of oblivion in more than one way due to this president and his cronies. If he doesn't manage to light the 'Iran-match,' then it will be the economic collapse that is coming. There is no way around it; millions of Americans are going to be homeless and desperate in just a very few years.

Of course paygo is a non-starter.

Posted by: Maeven on January 22, 2007 at 9:15 PM | PERMALINK

Sorry for the repeat (and rewrite) of that last one. I got an error message when I originally posted it and it was delayed publishing. I didn't realize until after I rewrote it that the first one had, indeed, finally been published.

Posted by: Maeven on January 22, 2007 at 9:20 PM | PERMALINK

where was the progressives' response, "We have a looming social security and medicare crisis that must be addressed - What better time than now

Um... That's why Gore talked about a lock box, no? And was sufficiently mocked for his efforts.

Posted by: gex on January 22, 2007 at 9:41 PM | PERMALINK

No, it's around 3.5% (including the SocSec raiding). That's still pretty bad, but we haven't seen 6% since the days of Ronald "don't tax but spend" Reagan

It must be higher than that. The wars are off the books.

Posted by: gex on January 22, 2007 at 9:43 PM | PERMALINK

Um... That's why Gore talked about a lock box, no? And was sufficiently mocked for his efforts.

Leaving aside "mocked" (sufficiently or not), what SNL lampooned was Gore's choice of metaphor and how he explained it - not the plan. Shoring up social security was what the American people wanted, and they've registered that want consistently in polls and in that election.

We got robbed of more than our choice for president.

Posted by: Maeven on January 22, 2007 at 10:00 PM | PERMALINK

This is how it's done and I'm surprised no one figured it out.

If you inherit a bad economy upon office.

1) tighten belts for 2/3 years till the 1.5 years before the next election cycle

2) with a lot of fanfare announce new iniatives, like 5% tax cuts, minimum wage increase, health cover in the last 1.5 years before the election cycle.

3) bring the economy back to net-net neutral.

4) ignore the media

5) Make sure the solid block of voters get the money in their hands both repubs/dems.

Let the oppo stew in their own juice.

This is not good for the country but when you're dealing with drug addled, paedo crowd, you need to take away the incentive to raid the pantry.

Posted by: shanks on January 22, 2007 at 11:31 PM | PERMALINK

Thomas3.6 1/2

According to Wikipedia, Gray Davis inherited a budget surplus from Pete Wilson in 1999 but was running a 34 billion dollar deficit by 2003.

Claiming that Democrats are always fiscal conservatives and Republicans are always spend thrifts sound like "water carrying" to me.

Posted by: superdestroyer on January 23, 2007 at 5:06 AM | PERMALINK

The bond market is not signalling that we must start acting responsibily soon.

Posted by: bob h on January 23, 2007 at 7:53 AM | PERMALINK

Maybe the point is not that Democrats should not be responsible, but while being responsible they should really punish the recipients of Republican largess.

Identify the companies getting no-bid contracts and refer them for GAO or IRS audits.

Identify all the 'bridge-to-nowhere projects' and deduct the value of those projects, adjusted for inflation, from future transportation bills.

Congress-members can refuse to take the calls from the K-Street firms that were part of the K-Street project-the firms will have to close and the partners will have to form new firms, but the point will be made.

Let's get petty!!!

Posted by: Xenos on January 23, 2007 at 9:11 AM | PERMALINK

"Looming Insolvency of Social Security" What Do they Smoke at AP?

'Yes, an AP story tells us that President Bush wants to address the "looming insolvency of Social Security." Since the non-partisan Congressional Budget Office projects that Social Security can pay all future benefits for the next 39 years, with no changes whatsoever, this definitely gives new meaning to the word "looming" or perhaps "insolvency."

The real headline for this article should have been that Fed Chairman Ben Bernanke is apparently suggesting that the federal government default on some of the government bonds held by the Social Security trust fund. That would seem to be the implication of his suggestion that we restructure Social Security and presumably not pay the full benefits mandated under current law.

Perhaps Mr. Bernanke is following in the foodsteps of President Kirchner in Argentina. Argentina has seen four and a half years of very impressive growth following the partial default on its debt. In fact, Rafael Correa, Ecuador's new president, was sufficiently impressed that he is now considering a similar step.

Of course, if Mr. Bernanke wants to go in the direction of defaulting on U.S. government debt, the default should not just be on the government bonds held by the country's workers through the Social Security trust fund. Any default should also hit the bonds held by wealthy people, large corporations, and central banks. Personally, I don't think that default is a good strategy for the United States at this time, but the fact that Mr. Bernanke appears to advocate it is certainly newsworthy.'

--Dean Baker
http://www.prospect.org/deanbaker/

Or check out Brad Setser:

[snip]
In my view, the real issue here is how will the rest of the government manage when it cannot finance itself by borrowing from the Social Security Trust Fund. I disagree with my colleague Felix Salmon. Felix suggests that the overall fiscal position of the US government is a good reason to cut social security benefits.

Ultimately, Social Security benefits and other government entitlements might have to be cut in order to bring US fiscal policy into line

I think Felix has it backwards. US fiscal policy needs to be bought into line so that the rest of the government can repay the money it borrowed from Social Security, allowing Social Security to pay its promised benefits.

That, after all, was the point of the trust fund. The fact that other taxes were cut and the government ran a deficit rather than paying down its assets over the past few years doesn't in any way reduce the (non-Social Security) government's obligation to make good on its financial obligation to repay the Social Security trust.

[snip]

'Cutting Social Security benefits while raising payroll tax revenues is certainly one way of improving the overall long-term solvency of the federal government. Social Security would be able to finance the rest of the government for an even longer period of time. But it also effectively shifts more of the financing of the overall government towards the regressive tax on wage income -- the payroll tax.

That is the wrong thing to do - especially when globalization is already putting pressure on wage income and adding to concerns about economic insecurity.

Instead we ought to be shifting more of the burden of funding the overall government back to the income tax -- or perhaps to an energy tax. And, to the best of my knowledge, that is exactly what repaying the Social Security trust fund out of general revenues rather than financing the rest of the government out of the payroll tax will do.'

^^^^^
But there was a tiny flash of reality from our new Fed Chair:

"The general view is that tax cuts do not pay for themselves." - Federal Reserve Chairman Ben S. Bernanke

Posted by: MsNThrope on January 23, 2007 at 12:07 PM | PERMALINK

Dems have a problem. They behave fiscally responsible, then they run out and promise new programs. It is the promise of new programs that brings the Republican revolt, a la Gingrich.

Republicans, as they have always done, stick to their ideology of big government expansion, flat taxes, western expansion and socialism for big corporations. (Just like the Democratic left does).

The trick for Dems is to say: "See, we shrink government, and then we refuse to grant government programs to our conservative left"
This is what Gore wanted, but was forced into nanny Gore by the primaries.

Dems can govern forever. Make taxes progressive. Voters of both parties will be pleased as they see government become efficient, and a great deal of warmth and happiness will spread as long as Dems refrain from promising new, bigger programs, a la Lieberman.

Posted by: Matt on January 23, 2007 at 2:44 PM | PERMALINK




 

 

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