February 03, 2004

Karl Rove? A genius? Not if he's behind this....
Posted by Jon Henke

Paul Krugman was almost right. We're not in danger of becoming a One-Party nation.....we're in danger of becoming a One-Ideology Nation. There are the liberal Democrats....and the liberal Republicans.

The biggest difference between them is the question of just how far down we should be pushing that pedal when we hit the turn. The WaPo reports on Bush's budget proposal....

President Bush has drafted an election-year budget that shows considerably more political concern for his conservative base, which is upset over the government's steady growth, than for any need to assuage moderate voters in November.

Pressing his claim to fiscal conservatism, Bush has embraced spending proposals that quickly enraged liberals but may also frighten moderate swing voters this fall, budget analysts said.

The proposed cuts, in dollar terms, will have little impact on the budget deficit, which the White House put at $521 billion this year. But the names of several programs on the chopping block -- housing assistance for the elderly, vocational education, lead-hazard reduction, local law enforcement grants -- allow the president to argue that he has put forth a tough-minded spending plan for 2005.

"With Congress's help in enacting the budget we transmit today, we will be well on the path to cutting the deficit in half within five years," White House budget director Joshua B. Bolten said.

The problem, though, is not the next five years. The real problems lie 10-20-30 years in the future. Cutting discretionary spending, as Bush proposes, helps very little. It's the structural spending increases that pose the real problem. Offering to cut a law enforcement grant does not solve the long term problem....it simply makes the short term problem appear less objectionable.

Think of it this way: You run a baseball team, and have structured your players contracts so that they increase by 20% every year. Now, you can afford it. But within a few years, as the total mandatory costs rise, you will face a choice: either eliminate those players entirely, find new sources of revenue to pay them...or incur massive, destabilizing deficits.

And remember...those "new sources of revenue" are called "tax hikes" and they are not entirely elastic. If you raise them sufficient to cover the shortfall, you WILL have negative economic consequences.

Of couse, "massive, destabilizing deficits" are, themselves, a negative economic consequence of doing nothing.

So, we have to make some choices now, and the conservatives are clamoring for it. They want government intervention in the economy reduced - they want spending cuts - they want fiscal responsibility.

And what does Bush do to assuage them? He assures the fat man that he'll reduce his risk of heart attack by arranging his tie...just...so. Well, maybe not the heart attack, but he'll look good and electable while he's having it.

I am not reassured. My kingdom for a responsible non-socialist with a chance in the election.

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