Why Our Deficit Politics are Broken

Saying you're a deficit hawk is like saying you're a patriot. Everybody claims to be one, but the definitions vary so wildly as to make the term utterly worthless. Catherine Rampell breaks down the internecine war among self-proclaimed hawks at the New York Times' Economix blog. It's a good piece, but I disagree ever-so-slightly with her take on why we can't get a good conversation going about fixing structural problems with our debt.


She writes:

The biggest criticism I have right now of Washington's handling of fiscal policy: Yes, government officials can do things that foster economic recovery this year. And they can do things that will save the economy from a debt crisis 10 years from now. But the options on the table for fixing the economy today are relatively concrete (if sometimes controversial), whereas those for reducing the budget tomorrow are notoriously vague...

I think that's true, but it's not surprising. Obviously a bill that makes its way to the president's desk is more specific than an idea for a bill that hasn't been written. Moreover, there's no political gain in writing up a concrete, rational plan for budget reduction. Fighting the deficit will require a painful combination of tax increases and budget cuts. It will be a bitter pill. If you think spending an extra $787 billion to fight a recession didn't go over well, try presenting a bill that raises taxes and reduces services in the name of "shoring up our long-term finances."

This reluctance to commit to, or even discuss, a game plan, I think, is what makes lots of people nervous about encouraging their elected officials to spend more money now, even if such spending might help put more of the jobless back to work. They just don't trust legislators to exercise self-discipline, even when boom times return.

Rampell is absolutely right that a lot of Americans, especially right of center, are concerned about the Ricardian impact of overspending today, because they're afraid that the other shoe will drop in the form of taxes or reduced spending in the future. Even though I support deficit spending, I'll acknowledge that this is a legitimate concern. But the "reluctance to commit to, or even discuss, a game plan" goes back to politics. The "game plan" is going to be ugly.

For example, the bulk of our long-term debt crisis lives in entitlement spending -- Medicare and Social Security. Reforming entitlements by means-testing both benefits, raising the SS age, or tightening Medicare outlays requires removing benefits from retirees and soon-to-be retirees, who represent both the richest segments of the population and the most likely to vote. Maybe being the first politician to propose these kind of changes will earn major brownie points from reasonable voters. More likely, it will involve a great weeping and gnashing of dentures, and electoral calamity. Finally...

Maybe the Conrad-Gregg proposal for a "fiscal task force" will help; the verdict is still out.

The Conrad-Gregg proposal shows exactly how serious our elected fiscal hawks are. That is, not at all. The duo's debt-fighting bill would require a super-majority to pass both the House and Senate. It's designed to be impossible to pass. Our electeds aren't afraid of discussing ideas to reduce the deficit. They're afraid of what happens if we hear them.