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July 23, 2011

No Time to Go Wobbly

Greece isn’t the only country to try spending its way to prosperity – only to find a sure way to poverty. The same delusion has tempted other European governments. Portugal comes readily to mind, and Italy may be next to discover that what looked like the road to Easy Street leads instead to Skid Row.

The temptation to spend more than a government’s got can be intoxicating. (See Washington, D.C.) But it’s beginning to lose its lure. On both sides of the pond.

“Governments don’t reduce deficits by raising taxes on the people; governments reduce deficits by controlling spending and stimulating new wealth.”

–Ronald Reagan

Greece isn’t the only country to try spending its way to prosperity – only to find a sure way to poverty. The same delusion has tempted other European governments. Portugal comes readily to mind, and Italy may be next to discover that what looked like the road to Easy Street leads instead to Skid Row.

The temptation to spend more than a government’s got can be intoxicating. (See Washington, D.C.) But it’s beginning to lose its lure. On both sides of the pond.

For the moment Washington has tied itself into one grand knot rather than take the only medicine known to cure the hangover that comes after a long spending binge: Sober up and purge the system.

But the president and his party want to keep on taxing (just the rich, you understand) and spending (just on sacred cows like Medicare, Medicaid, Social Security, and/or whatever program is the president’s favorite today).

As for the opposition, it doesn’t have the votes to pass a balanced budget all by itself.

Result: Stalemate. It happens from time to time in Washington, and every time it does, We the People are supposed to panic. Or at least be scared into taxing and spending more. Which is just how the country got into this fix.

A good belt of Old Hair of the Dog will fix us right up, we’re assured. And there will always be those who believe it. It’s a lot easier than changing our ways.

The GOP’s leader in the Senate, Mitch McConnell, has devised his own way not to face the music: Hand the power to raise the debt limit to the president if he’s so eager to keep spending.

This ploy is constitutionally dubious – can Congress really hand off its responsibility for authorizing more national debt to the chief executive? – and politically transparent. The minority leader would prefer that a Democratic president bear the onus for pushing the United States even further into debt. This isn’t any kind of solution. It’s a substitute for one.

Republicans in the House have their own way of avoiding responsibility. They’ve proposed a constitutional amendment requiring a balanced budget. Anything rather than actually balance it. It’s a time-honored dodge.

When the ancients found themselves in a quandary, they consulted the stars. In this country, those more interested in putting off a problem than solving it consult the Constitution to see what panaceas they can write on it like so much graffiti. It’s a way to put off hard decisions rather than have to make them.

This time the stargazers have come up with a doozy of a balanced-budget amendment. It picks an arbitrary number (18 percent of the gross domestic product) as a limit on federal spending, and requires a super-majority to pass any tax increase, even in time of war, an economic depression, or some unforeseen emergency. And one will surely occur, the vagaries of history being what they are. This isn’t a plan so much as an excuse for one.

Far from solving anything, this purely theoretical “solution” can’t even be passed, thanks to a Democratic majority in the Senate. It’s scarcely worth even criticizing.

At the other end of Pennsylvania Avenue, the president has his own favorite dodge: appoint a commission to suggest ways to economize. It sure beats actually having to economize. As in Bowles-Simpson Commission. It came up with a whole array of proposals and, while White House aides leaked word that the president supports this one or that one, he himself has been careful not to commit himself to any that might actually matter.

Now the president has had a good word for the ideas put forth by the Gang of Six Again (now that Oklahoma’s Tom Coburn has rejoined the group). But is Barack Obama really ready to slash taxes, trim entitlements like Medicare and Social Security, and sign on to a plan that even Eric Cantor, the budget hawk in the House, could support? What’ll that do to his plans to demagogue his way to re-election on the strength of Mediscare and Soak the Rich?

One day the president is warning that unless the debt limit is raised his way, next month’s Social Security checks won’t go out – “there may simply not be the money in the coffers” – and the next he’s talking sense. Or is he just talking? For weeks All the President’s Men have been conjuring up visions of End Times if they’re not allowed to go on taxing-and-spending and so avoid (shudder) Default. Now the president says he’s ready to cut taxes and entitlements. Which is it? Both? Neither? It depends on what the political occasion calls for at the moment.

Throughout all this drummed-up Sturm und Drang the American public has remained remarkably calm, not to say a little bored. Instead of going into Widespread Panic at all these prophecies of Imminent Doom, most Americans may only have stifled a yawn. Maybe because they’ve seen this movie before. Such confrontations between the legislative and executive branches are scarcely novel. For a time Barack Obama seemed to have chosen Bill Clinton’s showdown with Newt Gingrich circa 1995-96 as his model. But I knew Bill Clinton, and Barack Obama is no Bill Clinton.

This time it may not be the Republicans who blink first. And why should they? As the Iron Lady herself, Margaret Thatcher, told Bush the First at a decisive moment, this is no time to go wobbly. If the Republicans do, this opportunity to achieve real reform – by stopping runaway federal spending at last – could be lost, and another decade of growth with it. As in Japan’s lost decade.

Among the endless platitudes popular with the punditry whenever such deadlocks occur is the always popular complaint that Washington is dysfunctional. Just where is that complaint supposed to lead, if anywhere? Are we all supposed to throw up our hands at this point and abandon hope for all who enter there?

On the contrary, Washington is functioning just as the Framers of the Constitution envisioned. It’s called divided government. In which each branch, and even each house of Congress, has been deliberately designed to serve as a check on the other. And if they can’t agree, then it will be up to We the People to decide which politicians we wish to keep in office and which to replace at the next election.

There’s no need to panic. There is still a Constitution to guide us – unexpurgated and unamended for now, thank goodness. And if these politicians can’t work things out, we’ll find others who will.

This country has survived far more serious challenges. A little dose of historical perspective all around would seem in order just now. As a president who took office in the midst of a real crisis, Franklin D. Roosevelt, observed at the time, this nation will endure as it has endured. Of course he was a happy warrior – a style the country’s current chief executive would do well to emulate. Instead of coming on like a Prophet of Doom.

Lest we forget, this constitutional republic was conceived and born with the threat of default on its national debt hanging over its head. But back then we had a secretary of the Treasury who was both visionary and practical, a genius named Alexander Hamilton, a man with a plan to save the full faith and credit of the United States. Today we have … Timothy Geithner. And while Hamilton won the support of a president named Washington, today we have as president … Barack Obama. The progression of American leaders since 1787, the year of the constitutional convention, should be enough to instill a little humility in even the most fervent believer in the evolution of man.


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