JONATHAN COHN JANUARY 21, 2011
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I think I'm finally beginning to understand GOP thinking about fiscal policy. It's not that they're at war, as Krugman thought, with logic. Or, as Jonathan Chait writes, with arithmetic. Or even with CBO, as Ezra Klein concludes. It's the concept of budgeting that they don't like.
That's my takeaway from Greg Mankiw's seemingly bizarre post yesterday, in which he mocked Democrats on health care:
I have a plan to reduce the budget deficit. The essence of the plan is the federal government writing me a check for $1 billion. The plan will be financed by $3 billion of tax increases. According to my back-of-the envelope calculations, giving me that $1 billion will reduce the budget deficit by $2 billion.
For Mankiw, and for Charles Krauthammer, who has a very similar column today, this is self-evidently foolish as a deficit reduction plan. Put aside casual misdirection (both of them imply that ACA raises spending and taxes, but in fact there's also quite a bit of spending cuts in ACA—something that Republican politicians have made a chief talking point against reform). Put aside too outright lies and myths; Krauthammer embraces 10/6, which Chait once again destroys. Put aside, too, that Mankiw's "plan" of giving $1B to him personally isn't actually conceptually different from real-life plans to give very wealthy people very large tax cuts, without the corresponding new revenues or spending cuts to balance them, that Mankiw has supported in the past.
No, just take them at face value. What's going on? What is Mankiw telling us?
It's the idea of a budget they don't like. Here's NRO's Reihan Salam, applauding Mankiw's post:
In my view, it is conceptually useful to think of the spending component and the revenue-raising component of PPACA separately. Why? Because there are much better ways to raise the same amount of revenue, e.g., by eliminating or paring back the mortgage interest deduction and the state and local tax deduction, among other thing. My sense is that thinking of revenue-raising mechanisms separately leads us to better public policy conclusions.
I don't want to stretch what Salam said too far, but let's just say it pointed me to a way through the confusion that I've had, and that I think others have had, about conservative budget thinking, and makes sense of Mankiw—and of GOP opposition to PAYGO, support for unfunded tax cuts, and the rest of the Republican fiscal stew.
To understand what they're saying, just throw out the entire concept of a budget.
So: to characterize conservative talk about revenues and spending, I think what I'd say is that conservatives believe that each program, and every tax, should be judged on its own merits. If a spending program is necessary, like missile defense, then it should be fully funded. If not, it should not be funded. On revenues, the justification for any sort of taxation is that citizens should have "skin in the game," and therefore everyone should pay the same, small amount. Any more taxes, and any more spending, are by this way of thinking fiscally irresponsible.
Now, you may note at this point that there's nothing in that formula to make government revenues equal government spending. As far as I can tell, that's correct; conservatives aren't interested in that question. Oh, there's plenty of lip service about "budget deficits," but the point is that they've never made sense if you read "budget deficit" as "government revenues minus government spending." It does, however, suddenly make sense if you translate "budget deficit" to mean "unwarranted spending or taxes." Regardless, that is, of how changes in that would add up.
That's why the whole concept of a fiscally sound bill that involves new spending on health care is nonsensical to conservatives who believe that individual health care just isn't the job of the federal government, a conclusion that liberals find baffling. Yes, in the trenches, some Republicans have made specific arguments about why the CBO score is wrong. But you can tell, I think, that their hearts aren't really into it—or at least, that would explain the poor quality of some of their arguments, such as the idea that the cost of "doc fix" somehow or another is both a cost of passing and of repealing ACA. Whatever, they seem to be saying; why are we even debating this, when it's self-evident that increasing the scope of government responsibilities to include some form of universal health care, even if it's structured by creating markets, is a mistake.
That still doesn't excuse shenanigans like 10/6, which is just factually wrong. And, of course, it doesn't mean that Republicans are correct. And it certainly doesn't excuse actual deficit hawks, people who really do want government receipts to equal government expenditures, from mistakenly believing that folks like Paul Ryan are their allies. All it means is that, when listening to liberals and conservatives debate the budget, remember that they're often talking past each other—because, I strongly suspect, they're just using the same words to talk about two different things.
7 comments
Think of Democrats (or liberals) and Republicans (or conservatives) as men and women (or women and men if you prefer). Men and women can converse, even in the same language and using the same words, and never communicate. Why is that? No two people share the same experiences, at least not in the same way. As between men and women, the X and the Y chromosomes must make their experiences so different as to essentially occupy different universes. So too with liberals and conservatives. So no matter how hard we try, communication between them will always encounter a barrier. Ask your wife if she agrees.
- rayward
January 21, 2011 at 2:36pm
Republicans are trying to use massive budget deficits as a lever to kill Social Security and other New Deal programs, without actually have to SAY that's what they're doing. Because every time they SAY that (Reagan, Gingrich, Bush-II) the people vote to defend Social Security and other New Deal programs. So, naturally, they don't talk about the idea of a "budget", they just want to cut taxes, raise the military, and use the resulting deficits to bludgeon Social Programs. That's the Reagan plan, as followed since 1980 on. The Orwellian phrases and goals make it sound good, until you peel those away to find the destrictive reality they hide.
- AllanL5
January 21, 2011 at 2:47pm
I'm unsure of how to feel about this article. On one hand, I think it is an interesting notion that Republicans essentially view every piece of government work as an island which should be funded or not funded based upon how they view its worth. But at the same time, that's completely crazy. I don't have any examples off the top of my head of, but there have to be examples of Republicans cutting some program in order to fund another. Isn't that the whole notion of "Cut-Go?" Unless that's a complete farce they're using because they have to say something. (A likely prospect.) Also, I'm not sure that's a fair definition at the end. I think it is a separate argument to say that healthcare is not the job of the government and then say that there shouldn't be budget deficits. They haven't been making that argument in these examples. I think the point that they are trying to make in these op-eds, is that they're idiots.
- DocStrange
January 21, 2011 at 6:02pm
When Republicans can advocate increasing the national debt as a way of shrinking government, or that you can cut taxes and revenues will grow, or that "deficits don't matter," or that "the deficit is big enough to take care of itself," you are not talking about a political party that intends to balance the budget. All I see in the Mankiw argument is that cutting the deficit by raising revenues is not permitted and can not be used to justify a program as reducing the deficit.
- Nusholtz
January 21, 2011 at 6:24pm
The present situation reminds me of that old joke about the fellow who jumps off the top of the Empire State Building. As he passes the twentieth floor he's heard to say: "so far so good." eventually we will hit the pavement and then ideology will seem quite beside the point. The pavement in this case will probably look like the bond market. Investers in Zurich and Beijing really don't care about our politics.
- paskunac
January 22, 2011 at 6:14am
I think the focus on strictly logical reading is failing to reveal the logic of Republican thought: the premise seems to be that it doesn't matter if the numbers add up if what you're paying for is figured as itself nonsensical. As this point convincingly argues, The point isn't to add up to the totality of elements, it's to isolate an element, claim that it's a first principles issue, and make it totemic or a metonymy for what the public already considers a legitimate toten (hence the GOP justifies making a vote on repeal of ACA HR-2 as a matter of protecting jobs to subsume strictly ideological objection under something that's pragmatic only if you're willing to take their ideology on board, either because you already share this article of faith or are open to it because the connection seems conceptually plausible). Thus what we are arguing about in the budget isn't really whether the numbers add up but the non-dollar values of budget elements as atoms and their imputed cumulative effect on "freedom" (which nevertheless has a lot to do with the ability of the very wealthy to become that much more disproportionately wealthy). On the flip side, there is a logic that insists that cutting government spending to the tune of $100bn will have a certain demonstration effect of showing that the private sector will more than offset this, which is related as private sector growth but is probably better understood as though it created some equivalent quanta of "freedom" because markets will somehow organise equivalent solutions without the hand of the government being involved. Evidence that markets aren't reliable in that fashion are axiomatically excluded. Empirical immanent critique doesn't shame conservatives into behaving differently, and their going response to increasing material contradiction is to rely on temporal and figural displacement (e.g. forget about the fact that we ran the economy into the ditch, if the Democrats don't have it out yet, they don't have the answers we're promising not by concrete policy but by figure).
- bayardgb
January 22, 2011 at 10:59am
It is almost a theology vs. modernity circus act, not unlike the problem a radical Islamic government might have with balancing the needs of an actual nation-state against a theological vision that regards states as illicit entities coming between the believer and Allah. The Republican Party has been venomously attacking "government" for the last two years as something viscerally opposed to a rigid notion of American "freedom" (which appears to involve, curiously enough, cashing your federal disability check and then driving on the federal interstate system in order to get to your teabagger rally) and now they are getting too close to governing for ideological comfort.
- ironyroad
January 22, 2011 at 2:39pm