Any hope we might have of addressing the federal government’s long-term financial crisis depends on bipartisan cooperation.
Which of course means that we have no hope whatsoever.
But wait! What is that off on the horizon to the far right? A prominent conservative making sense and telling the truth about fiscal issues? Why yes, it is!! Let’s go check it out!
Kevin D. Williamson is deputy editor of National Review and author of its Exchequer blog, focusing on the debt and other fiscal issues. He is also, as far as I can tell, very very conservative. But to his credit, he has run out of patience with the Republicans’ knee-jerk instinct to pretend that tax cuts are the cure for all that ails us economically.
Back in April, for example, Williamson attacked the conservative credo that tax cuts pay for themselves, noting that “a poorly applied supply-side analysis has infantilized Republicans when it comes to the budget. They love to cut taxes but cannot bring themselves to cut spending: It’s eat dessert first and leave the spinach on the table.”
“There is no evidence that the tax cuts on net produced more revenue than the Treasury would have realized without them…. It’s a just-so story, a bedtime fairy tale Republicans tell themselves to shake off fear of the deficit bogeyman. It’s whistling past the fiscal graveyard. But this kind of talk is distressingly unremarkable in Republican political circles.”
“How is an unfunded tax cut today different from an unfunded stimulus-spending bill today?” he asks in a post from July. “Both increase the deficit, both perform a wealth transfer from the future to the present under the theory that doing so will increase growth and spur the economy. Both are irresponsible.”
The core of Williamson’s argument is that tax cuts without offsetting cuts in spending are not really tax cuts at all. They are mere tax deferrals, in effect pushing the bill onto future generations. I not only agree with that analysis, I would take it a step further and argue that the GOP’s insistence on cutting taxes over the last three decades has helped encourage their worst nightmare.
The lesson is pretty clear, and was driven home particularly hard in the the Bush years: Tax cuts increase the size, popularity and power of government.
Because tax cuts disguise the true cost of government programs. They allow voters to demand more and more government help — more social programs, more earmarks, more wars — while paying less and less for it. It’s a pretty simple rule of economics: If you lower the price of something, people will want more of it, and the dynamic applies to government just as surely as it applies to Krispy Kreme doughnuts.
As a result, Williamson warns in a recent blog, “any Republican who sends me a press release talking up tax cuts without a word about spending cuts gets to be jackass of the day.” (He goes on to exempt Democrats from that contest because, he says, “you can’t be jackass of the day when you’re a registered jackass for life.” Being the reasonable sort, Williamson is of course not casting aspersions on all Democrats with that remark; he is merely noting that their political symbol is the donkey. Right, Kevin?)
On Thursday, congressional Republicans will announce their political agenda should they regain control of the House and/or Senate. I suspect that once again, it will be heavy on promised tax cuts and very skimpy on proposed spending cuts to offset that lost revenue. If so, it will be interesting to see how Williamson responds.
But let’s be clear here. Williamson and other like-minded conservatives remain conservative, and if given a free hand, their approach to solving the nation’s fiscal crisis would be very different from that taken by their liberal counterparts. But the reality is, there is no conceivable political scenario that will give them that free hand, and the same is also true for liberals.
Given that fact, the key will be to find common ground between the two camps, and the fiscal realism preached by Williamson and a few others offers at least a hope that such ground exists.
We know what the solution will be: Addressing our national debt will require serious cuts in government spending, including middle-class entitlements, business subsidies and a dramatic rethinking of our global military structure. The longer we delay such steps, the more dramatic the retrenchment will have to be.
However, a solution is also going to require across-the-board tax increases, timed to begin once the economy has had a chance to recover. That too will be essential. Both steps — tax hikes and spending cuts — are absolutely necessary if the bargain is to work economically, politically and mathematically.
Maybe it’s my own delusions playing out, but I believe there is more willingness to contemplate such a deal on the left than on the right. I’m not saying that there’s anything close to a majority of Democrats ready to accept serious budget cuts, but I do believe the subject can at least be broached in the context of a larger political bargain.
I do not see similar bargaining room on the right, in large part because the Republican Party has made opposition to taxes and the embrace of tax cuts the defining characteristic of its movement. The existence of Williamson and others willing to tell some hard truths from within conservatism at least offers hope that could change.