Thursday, October 14, 2010

Budget Politics

While I was busy defending Congress in general terms yesterday, I see Andrew Sullivan was busy attacking legislatures on their specific behavior:
Increasingly, it seems to me, the legislative branch is really not about legislating. It's about getting re-elected with often symbolic partisan gestures and passing laws to benefit those interests that will get you re-elected. Serious attempts to take collective bipartisan responsibility for state and federal debt, for example, seem rare. That's what commissions are for, apparently! But what's a legislature responsible for if not the budget it passes?
I think this is pretty weak, on two counts.  The first is the creeping Broderism...why "bipartisan" responsibility?  During periods of  divided government, sure it's fair to expect pols to find ways to work together because they have to -- but beyond that, there's no reason I can think of for anyone to specifically prefer a bipartisan solution to national problems. 

And on deficit politics, I'm sorry, but what the hell is Sullivan talking about?  The Democrats just did take responsibility for the long-term budget situation, by passing a massive bill that cut the deficit a fair amount in the short term and a lot in the long term.  Yes, the Affordable Care Act.  Liberal Democrats have also been trying, but don't have the votes, to improve the long-term revenue situation by increasing rates on rich folks.  That's nothing new.  The last time Democrats had unified control of Congress and the presidency, they passed a massive deficit-reduction package, and before that Democratic in Congress convinced a Republican president to support deficit reduction over the objections of conservative Republicans in Congress. 

And where do all those deficits come from that Democrats keep attacking?  Well, from massive tax cuts when Republicans had effective unified control in 1981, and then a combination of massive tax cuts and unfunded spending increases the next time the Republicans had unified control during this past decade.

In other words, what Sullivan calls serious attempts to take responsibility for debt are rare -- for Republicans, who (rhetoric aside) simply support very high budget deficits.  Those attempts are not rare at all for Democrats, including Congressional Democrats. At least not over the last thirty plus years.

I really don't understand what's so difficult about this, and why deficit hawks -- especially someone like Sullivan, who is usually pretty good at cutting through phony rhetoric -- don't see it plainly.  I mean, I'm not a deficit hawk, so I don't really have a dog in this fight, but it sure seems to me that deficit hawks should be a lot more supportive of the party that consistently supports their agenda.  To be fair, Sullivan has never hesitated to call out Republicans over budget politics, and he's been (in my opinion) properly skeptical of the Tea Party crowd, demanding to see actual proposals before he believes that they would cut deficits.  But where's the support for those who do have, and then actually enact, such plans?


  1. When I read this on Sullivan's blog....

    Increasingly, it seems to me, the legislative branch is really not about legislating. It's about getting re-elected with often symbolic partisan gestures and passing laws to benefit those interests that will get you re-elected.

    ....I said to myself, oh man, Bernstein must have just blown a gasket! I mean, Sullivan just described the way a democracy is supposed to work, right?! Politics is supposed to be all about getting re-elected. Politicians are supposed to pass laws benefiting those who will get him re-elected.

    I agree with all that, but you can see where Sullivan is coming from. His real complaint shouldn't be that politicans aren't willing to sacrifice their careers for a worthy cause; it should be that our culture simply does not reward politicans for acting in the national interest. Instead, it punishes them for it.

    And that, no matter how you slice it, is a major problem.

  2. Oh, and on the deficit issue, Sully is just full of shit.

    Of course Dems are the only party that has attempted to tackle the debt problem. But, you see, they also favor increasing taxes. And, no matter how reasonable Sully has become over the years, he still subscribes to the "Avoid tax hikes at any cost" dogma of the GOP.

  3. Sully, as you say, is good on these issues in many ways, but he's also at least an associate member of the "pain caucus," i.e. he has some kind of puritanical notion that chopping middle-class benefits like Social Security and Medicare would be good for us. It's his residual Toryism, maybe; he comes out of the political tradition in Britain that opposed the welfare state. So, the idea that you can do two good things at once, like extend health coverage to millions of people while also (and thereby) reducing deficits, escapes him. My impression was that the whole health-care debate didn't interest him much -- never captured his imagination, as some other topics do -- and so he didn't really listen closely to the ACA's advocates. Therefore he's less able to cut through the right's phony rhetoric on this issue than we've come to expect of him.

  4. Didn'y Sully come out and say he doesn't like Obama's tax plan 'cause it would raise HIS taxes? That's pretty much the turn of the screw right there, isn't it?

    Every time any political actor from the dead center on right of the spectrum says "deficit" or "balanced budget" or anything similar, what they really mean is, "Absolutely obliterate my taxes, I don't care if you have to fire every police officer in New York City to do it."

  5. This is one of those issues where perception and reality are so far apart as to be laughable if it weren't such an important issue. But the perception is something that the Republicans have pushed for more than 30 years, and they continue to push it whenever they can. And the media hardly ever challenges this perception. I wonder why that is?

  6. Andrew,

    You're right about my views on what pols should do -- yup, I think they should do things that will get them re-elected.

    On the rest...I think several comments here are unfair to Sullivan on taxes -- he's endorsed higher taxes. I'm not even sure he's really "pain caucus"...well, pain caucus policies, yes, but not (IIRC) pain caucus rhetoric. He certainly would prefer spending as a lower % of GDP than most liberals, but he's OK with Keynesian countercyclical deficits. And he advocates defense cuts, so he's not just using deficit politics as an excuse to go after SS/Medicare.

  7. I refuse to read the testosterone-addled ravings of Sully, but I did want to point out that you are both (all?) stuck in the wrong-headed "deficit dove" paradigm which has a sort of Augustinan "fiscal conservatism, but not now" vibe. W. did many bad things, but increasing the deficit was not one of them! There is no danger for a currency issuer in a floating exchange rate regime in running a deficit, and many dangers in not doing it - under any circumstances!

    If you want to know more about this and other aspects of what has come to be called "Modern Monetary Theory" (MMT), check out Warren Mosler's blog at

  8. Jim,
    Well, can't there be a problem if the instrument we have to manage the economy is "left-censored" in that we can't lower the interest rate past 0 without REALLY screwing things up?

    I like the argument about "who cares about the debt" much more when you also have the lever of interest rates to exercise some control over the whole enterprise. But I wonder if keeping an Ayn Rand disciple (see what I did there? Picked up on a Bernstein thread from yesterday!) at the helm of the Fed for almost 20 years ends up making the debt important.

    Not informed enough to know the answer,

  9. Matt,

    The interest rate doesn't really matter all that much. Marginal effects, but nowhere near enough to get the amount of press it does. The real action is and always has been in fiscal policy (which is why another round of QE from the fed isn't really going to do anything this time, either)

    What is really important to understand, though, is that (regardless of the institutional arrangments) the Fed and the Treasury are functionally part of the same entity. Neither can make a move without consulting the other, since everything they do has effects on the other. When the Treasury sells a bond, it's called "borrowing money", when the Fed does it, it's called "open market operations", but it ultimately has the same effect.

  10. I did say Sully was an "associate" member of the pain caucus. I almost said "fringe" member but decided that he's a little closer to the center of it than that -- but no, he's not hard-core, and he did support the stimulus. Still -- and while I don't have time at the moment to go hunt up specific passages -- I detect in his writing on this a refusal to believe that the welfare state, and especially SS and Medicare, can be made affordable. I've never seen him acknowledge, for instance, that SS is not really in a financial crisis (I think he's bought the right's rhetoric on that), and I don't think he's ever processed the fact that the Affordable Care Act is actually a deficit-reduction measure, specifically targeting Medicare (you know, with those "death panels" and whatnot). I'm not sure, but I think he may be a victim of the "household budget" fallacy, which essentially is a refusal to believe that government investment can actually solve social problems AND promote growth, thus making for higher future revenues. On the stimulus, he always refers to it as an "emergency measure" without any acknowledgement (that I recall) of its various measures for promoting forward-looking investment.

    So, on balance, he seems to me to believe, at bottom, that pain is good for us -- especially if by "pain" we don't mean "Andrew Sullivan doesn't get to vacation at the Cape every year" or anything radical like that.

  11. The problem you folks don't seem to grasp, is not that americans mind paying for their benefits ... it is that they don't like paying for others benefits.

    Couple that with the very large number who don't pay in to the system but are happy to take out, and over time you get a lot of people with "sense of entitlement".

    I may be from the Ron Swanson school, where the government has a hard time finding anything it can't completely screw up, but I think you all can see there is something important by linking what I put in to what I get out.

    Otherwise, it is just free money. I have no skin in the game, so who cares?

  12. I recall that Sullivan is in favor of a flat tax.

  13. To circle back a bit to the post and Sullivan is that the point seems to be that Democrats have actively worked on reducing deficit in the last 30 years and that the Republicans (with the notable exception of Bush I) have worked to increase it.

    And yet bizarrely, the Republicans carry the title of fiscal sanity as their banner and yet neither Andrew Sullivan or almost anyone else with a voice is willing to call them out on it.

    Instead we get this pablum that both sides are equally to blame. BS.

    What Democrats need to do, and Andrew is right on this, is run on their record of sanity. They have been working hard to take a catastrophe and turn the country slowly around and yet no one is trying to take credit for that.

  14. Why would you think the Left is fiscally responsible? Heck, they support all spending increases. They're just mad at W because THEY didn't get to enact the Great Society of Compassionate Conservatism New Deal Progressivism. But they're doubling down now. And hammering it all down our throats during the worst economy in decades.

    And the voters hate it, as we see.

  15. I like Dinar.and its revaluation of currency.

  16. can someone help me please about our debate in politics??

    im actually from the negative side and im going to defend the proposition ,"that the campaign budget for election should have its limitation"


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