Is The Country Paying a Price for Anti-Earmark Fever?
One of the odder aspects of recent American politics has been the bipartisan fervor against so-called “earmarks.” These are, it’s true, a less-than-ideal method of budgeting. But the U.S. budget process has a lot of flaws and I see no real reason to think that earmarking is high on the list. But John McCain and Barack Obama both hate ‘em and now they’re public enemy number one, so the Obama administration has made a big deal out of its earmark-free stimulus. But I wonder, has this really been a good feature on net?
As is well-known, in order to secure the votes of the handful of Republican Senators necessary to overcome the 60-vote hurdle, Obama had to make some non-trivial concessions. Those concessions have made the stimulus much less effective than it otherwise might have been and will lead to hundreds of thousands of people being unemployed who could have been engaged in productive labor. Suppose that instead of making this sort of large, substantive concession Obama had just been able to offer pointless pet projects for Pennsylvania and Maine. It seems to me that because those projects would have had locally concentrated benefits you could have made the deal worthwhile to Sens. Specter, Collins, and Snowe for a much lower bottom-line cost and ultimately better-served the public interest.
In other words, simply eliminating the most effective means of buying votes in the legislature doesn’t eliminate the practical necessity to do it. It just ensures that the vote-buying gets done in less efficient ways.
60 Responses to “Is The Country Paying a Price for Anti-Earmark Fever?”
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February 13th, 2009 at 2:05 pm
Completely agree. Have been saying this for two weeks.
February 13th, 2009 at 2:06 pm
My favorite response to making all earmarks public was Jack Kingston who took his list of earmarks and sent it to his constituents showing them how great a job he was doing for the district.
February 13th, 2009 at 2:15 pm
Exactly. As with Mark, I’ve been screaming at the TV: “Just include building ships at the Bath, ME shipyards and rebuilding the Port of Philadelphia or the PA Turnpike as part of the stimulus. Politically, it’s a no brainer. And, per DTM, I’m sure we could have found some lovely Cornhusker pork.
February 13th, 2009 at 2:24 pm
I believe the point is that absent earmarks, legislators vote their true conscience.
If you’re done laughing, I’ll continue.
Supposedly, you are not buying votes; you’re crafting a better bill. Earmarks let you bribe a congressman to allow a bad bill through. By eliminating them, you are forced to make a bill that is acceptable to more people, and therefore, better.
That assumes a lot. It is disproportionately hard to get people to cross party lines. It isn’t enough to satisfy the conscience of Snow, Spectre or Collins. They need to feel like they’ve won something for their party as a way to ameliorate their lack of loyalty to it. This makes the bill worse in the opinion of the majority. That’s bad.
If you didn’t need a supermajority, you would never need to do more than make good bills. They’d either be partisan, and passed by the majority party, or they’d be non-partisan (note, not bipartisan), and passed by a majority. Nobody would need, nor expect, more than satisfying themselves as to the bill’s worth.
February 13th, 2009 at 2:25 pm
Thus we have this principle:
The ability to buy votes with earmarks is good (bad) when our (their) “side” is in control. Who would have guessed?
February 13th, 2009 at 2:26 pm
Yeah. I took it for granted this is how the thing would pass. But then it really turned into more of an ugly episode than it probably needed to be.
And I’d like to think this Crusade Against Earmarks won’t be a theme of Obama’s presidency… at least absent some sort of crazy appropriation reform project that I definitely don’t see anyone taking up. Obviously things have to be compromised more fundamentally when the the math is closer to 50/50 in the Senate, but when you’re this close to 60 votes , I can’t understand the logic against dangling trivial earmarks as Republican crossover bait.
February 13th, 2009 at 2:27 pm
Suppose that instead of making this sort of large, substantive concession Obama had just been able to offer pointless pet projects for Pennsylvania and Maine. It seems to me that because those projects would have had locally concentrated benefits you could have made the deal worthwhile to Sens. Specter, Collins, and Snowe for a much lower bottom-line cost and ultimately better-served the public interest.
Pointless? Really? Why would you say pointless in one sentence and then say “those projects would have had locally concentrated benefits” in the next sentence? Can a project provide “locally concentrated benefits” and still be “pointless”?
February 13th, 2009 at 2:30 pm
Of course, this point highlights exactly why people like McCain and Obama are so opposed to earmarks. People often calculate the “cost” of earmarks in terms of how much money it takes to fund the specific projects contained therein.
Critics, on the other hand, point to how that small sprinkling of funds is used to garner wider support for gargantuan bills that never would have passed otherwise. So, for instance, you only have 45 yea votes and 55 nay votes for a really crappy defense appropriations bill. One that costs, for sake of argument, $500 billion. To get it to pass on its merits, the bill would have to come down to $350 billion.
Instead, the sausage makers offer each of five dissenting legislators a $1 billion pet project and thereby pass the crappy bill. At a cost not of $5 billion to tax payers, but $155 billion when you count the bill that got rammed through.
This system, of course, sounds like a grand bargain when you support the bill it’s being used to hammer through. And it sounds like a shitty system when you oppose the bill.
Which I think is why MY has a pretty sunny view of earmarks at the moment. One suspect his views might change when such tactics are used to pass something he opposes.
February 13th, 2009 at 2:36 pm
I don’t like earmarks, but they are not that big of a deal. They are particularly inconsequential in this bill. It is an attempt to find ways to spend money. That is very rare. Most bills are attempts to get things done with the minimum amount of money. In those cases, earmarks are counterproductive in addition to lowering the quality standard of the bill. In this case, if the whole thing consisted of earmarks it would probably be better. People want earmarks for things they want to happen right away.
If Obama had told all congressmen to go to their constituents and find every pet project that’s ready to go, and we’ll see about funding it, that would have been fine.
February 13th, 2009 at 2:59 pm
Great picie. Post even better. Spot on as usual.
February 13th, 2009 at 2:59 pm
The real reason Republicans were against this bill is because it couldn’t contain earmarks.
Earmarks come through connected donors. They are not based upon any rational criteria.
What will happen next is that there will be negotiations between the Obama Admin and state and local officials in promoting competition among potential projects. The projects will be known, along with the expected benefits, and placed on a website for everyone to see.
But this doesn’t remove the possibility of a congressman going to bat for a particular project, they just don’t get a final vote for their pet project.
Also, many of the best know earmarks were opposed by local groups. This process will likely reduce this type of problem.
February 13th, 2009 at 3:15 pm
I think that the argument against earmarks is a lot like the argument against corruption generally. For people with resources trying to get things done, it’s not a bad thing to have a way to smooth things out, but systemically it causes real problems.
February 13th, 2009 at 4:08 pm
He just didn’t acknowledge the full list of Senators who needed to be bought off
But, of course, the list isn’t fixed. If Nelson, Snowe/Collins, or Spector were demanding too much, see if a little bridge to nowhere might pry Murkowski loose (for example). Senators are generally ideologues when it is convenient.
February 13th, 2009 at 4:27 pm
The CW hostility to earmarks is part of a daft discourse about politics, the economy, and partisanship. Many of the same political and media voices that deride earmarks also pine for bipartisanship. Seems to me that less party discipline leads to more individualistic behavior in congress which leads to more pork. Which isn’t necessarily bad since many of the projects are worthwhile, and in this case do something toward the broader goal of stimulating the economy.
February 13th, 2009 at 4:28 pm
“Earmark reform” seemed to be an empowerment of the executive branch issue to me. It never occurred to me that it was a genuine principle.
As I said a while back, local government is WAYTHEFUCK more corrupt than federal government. Not only is machine politics alive and well, but there’s no substantial local coverage of any local government outside of NYC and LA (and maybe a few others). Thus, local government can do whatever the fuck they want, because they’ll always get reelected.
I mean, Gov. Taft in Ohio was convicted of felony racketeering in office, and FINISHED HIS TERM. He continued to take bribes and pay out to cronies and we were powerless to stop it.
Earmarks help prevent corruption as much as they’re a form of it.
February 13th, 2009 at 5:26 pm
I think earmarks are fine and a healthy part of politics. On this bill, however, putting in earmarks might have made it ridiculously easy for the Republicans to attack. At least in this bill, whenever the Republicans have complained about a spending measure, it’s usually either been fictional or unsensational. So, while I agree that the bill is seriously flawed, I think they did the right thing here.
February 13th, 2009 at 7:53 pm
I love how you liberals talk so breezily about buying votes in Maine, and justify earmarks. It shows Liberals have no morals. Republicans are the party of Lincoln – Freedom and Principle, Democrats are the party of Rod Blagojevich and Nancy Pelosi – Sleaze, Corruption, Graft.
February 13th, 2009 at 7:56 pm
this is probably one of the most ill conceived bills to have ever been introduced. It will add $3.2 trillion to the national debt in one fell swoop (current national debt is @ $4 trillion) and will accomplish very little in actual stimulus to the economy.
The Treasury will then have to sell this debt. At present, it would be the largest series of issues in history in a global economy that is rapidly becoming weary of the Dollar. This means that in order to attract capital, interest rates will have to rise. Inflation has been kept under control for the past 25 years after Volcker stuffed that genie into the bottle again after Carter and Ford.
Such a glut of U.S. debt will be very difficult for the capital markets to swallow. Remember, at the same time, the Europeans are trying to do the same thing. So there will be a debt glut. If they fail to sell this debt, even at high interest rates, the Treasury will resort to simply printing money. This is where the danger of hyperinflation lies. Think Weimar Germany and wheelbarrows of Deutsche Marks.
Between Social Security, Medicare, and other debt, the U.S. government’s IOU’s are all starting to come due. And Congress and the president, in their wisdom, are adding even more to the pile on the camel’s back. Throw in the precarious finances in california, New Jersey, New York, Michigan, and Ohio.
The bill is coming due, and it will not be pretty.
February 13th, 2009 at 8:07 pm
Those concessions have made the stimulus much less effective than it otherwise might have been and will lead to hundreds of thousands of people being unemployed who could have been engaged in productive labor.
A laughable bit of pure spin, made with not a shred of evidence. This bill is nothing more than a massive attempt to buy votes for the Democratic Party and send the bill to future taxpayers. There’s not enough “productive labor” coming out of this monstrosity to staff a McDonald’s.
February 13th, 2009 at 8:27 pm
>>Obama had to make some non-trivial concessions. ….
Really?? What exactly were those concessions? Please be specific….
February 13th, 2009 at 8:32 pm
Buying votes? BUYING VOTES??? You say it like it’s a good thing. It’s called corruption.
February 13th, 2009 at 8:50 pm
“the Obama administration has made a big deal out of its earmark-free stimulus”
Nice try. If you wanted to be truthful you would have said that “Obama has made a big deal of lying about the stimulus bill being free of earmarks.” The reconciled bill that just passed in the House is full
of earmarks.
“Those concessions have made the stimulus much less effective than it otherwise might have been and will lead to hundreds of thousands of people being unemployed who could have been engaged in productive labor.”
Nice dogma. In your opinion it made the stimulus less effective than it might have been. However, Democrats have never adequately rebutted the fact that, according to the CBO only 3% of the stimulus will be spent this year and only 16% will be spent by the end of 2010. That was an analysis of the original bill but I haven’t heard that any of the spending will be expedited in the reconciled bill. How does a bill that spends less than 20% of the total in the first 2 years provide stimulus to end the recession that is going on now. Furthermore, there were 250 economists in that Cato ad that ran in the NY Times (including three nobel laureates) who don’t think more government spending will fix our economic problems (see this as well). I am sure they don’t agree with Matthew’s unsubstantitated claim that the reductions in spending will make the stimulus bill less effective. I’d be willing to bet that those 250 economists are of the opinion that the spending reductions will make it less harmful. I am sure Paul Krugman agrees with Matthew, but so what. Neither he nor anyone has any empirical basis for believing that the stimulus will work. Proponents of this laughable power grab can merely claim that the two other times a developed country tried this kind of fiscal stimulus didn’t work but we think it will this time if we spend even more.
February 13th, 2009 at 8:53 pm
This is just plain stupid. Buy votes! For less money! Wake up, buy votes!! Plus, anyone with half a brain knows Snow Collins Spector were paid off for their vote. WHO IS DOING THAT RESEARCH. And the bill is loaded to the top with pork projects just under a different name. Man alive the Democrats and liberals get so much free ride in this country. When will it ever end? Who is going to take on that establishment? This is just seriously nuts how Americans love and protect their Democrats. No earmarks. Of course. $780 billion just spread evenly among the people. Are we out of our minds in this country. These politicians love spending other people’s money and get away with it too TOO easily.
February 13th, 2009 at 9:01 pm
This is -onot- a stimulus bill. It is a govt expansion bill. The recession is no worse than we had with Carter… Probably better since we’re in better shape than during the Carter years.
This “Spend-ulous” Bill is a Trojan Horse to expand the size, scope and range of the govt. The money will be spent as well as the normal spending and Nancy’s Omnibus $500B surprise we’ll get before Easter… The goal is to make govt so large, have so many receiving govt benefits that any attempt to roll back will create a huge backlash at the polls.
50% of taxpayers will receive checks and pay nothing. People on COBRA will have their COBRA benefits 65% paid. If they are near age 55 they will transition directly to Medicare for life… Unemployment benefits will be extended to the part timers and temp employees and length of unemployment will be extended… with over 1,000 pages written in convoluted language, released in .pdf-non searchable format, and held until 0830 on Friday -NOBODY- has read the entire bill…
But that is not the goal…
“Deficits do not matter” -President Obama
“Raising taxes is an issue of fairness” Senator Obama
This is all about redistributing wealth -not- about enabling anyone to earn it…
Some would say “THAT’S A GOOD THING”… I disagree
February 13th, 2009 at 10:05 pm
This was a funny post. What? You mean it wasn’t satire?
I’d laugh but this bill is not a laughing matter and it does contain earmarks — they just are unlabeled. Yep — Milwaukee gets schools they don’t need while my kid’s school doesn’t get the textbooks it needs. Think of the jobs those textbooks would create! (Although I don’t think the federal government ought to be funding either one. Just want to make the point of the stupidity of earmarks).
What should happen is that Congress can’t approve bills involving more than 1 billion in spending that contain more than 3 spending provisions. A bill can spend 100 billion or more but in no more than three provisions. That should keep the bills short enough that people can read them. But unlike the line item veto there is still room for horse trading. Fund project A and also B to get support. That way folks could read a bill and decide if a trade off was worth it or not. Spending has to pass on its merits or at least the merits of the trade. No sneaking through a pet project. And no stopping a bill because of 1 provision out of 100.
February 13th, 2009 at 10:34 pm
Those concessions have made the stimulus much less effective than it otherwise might have been and will lead to hundreds of thousands of people being unemployed who could have been engaged in productive labor.
How credulous you are. Depending on the source of course. If a Republican tried to sell you this ball of irrelevancy using spin like that, you’d spit on their shoes. With good reason.
I’m all for smart liberal bloggers, which you sometimes are. But I pay a lot of taxes to keep party hacks employed as toadies to tell me things like this. You’re redundant if that’s the role you want to play. You ought to be more independent.
February 13th, 2009 at 10:50 pm
I think people need to take a step back and look at the nature of this particular beast. What’s an earmark, what exactly constitutes pork? I’m sure some of it is wasteful spending (eg, Bridge to Nowhere), but some of it is necessary (I recall one some years back for my hometown of Indianapolis that was to keep a hospital open and serving low-income people). I imagine for some people, pork is like pornography: they know it when they see it. But I think often they don’t see it in their home districts, because it’s something that is beneficial to them.
As for the whole whinging about ‘buying votes,’ what do you think politics is? It’s the whole idea of compromise, and part of that compromise is giving your support for something you don’t want but somebody else does, in return for their support for something you want but they don’t. We try to keep the politicians from personally benefiting (usually with money, or things that can be used like it), and when they do it’s called corruption. Getting funding to build new schools is not corruption.
As for #20, Milos were you asleep for the past 8 years? Do you remember anything of Abramoff or Tom Delay or almost the entire Bush Administration (billions of dollars in cash on pallets delivered to Baghdad and disappearing)? The mind boggles and your selective memory. There are corrupt Democrats, and there are corrupt Republicans. But the GOP’s corruption was systemic (see K Street Project ).
February 13th, 2009 at 11:31 pm
First things first…
Many people (including commenters here) conflate earmarks with standard pork. They are not the same thing. This stimulus bill is full of pork — That is, line item budget requirements dictating that certain moneys be spent on pet projects. These, in theory, are traceable to their sponsors.
Earmarks, on the other hand, are added after an appropriations bill is voted on and are not traceable. If Senator Smith wants a new school built so that it can be named after him but he doesn’t have the guts to add a specific pork line item to the bill, he waits until an appropriations bill is passed, and then “earmarks” a portion of it for his pet purpose. So even though the appropriation that was approved was supposed to be general in nature, now a certain amount of money is dedicated to the senator’s pet project. Without careful digging, it looks like the Feds decided to build the new school on their own.
But on the meat of what Matt said, I loved this howler:
Those concessions have made the stimulus much less effective than it otherwise might have been and will lead to hundreds of thousands of people being unemployed who could have been engaged in productive labor.
Good one! Nothing — nothing — could have improved this stinker of pork-filled deficit spending other than killing it completely. Just ask the CBO.
February 14th, 2009 at 3:29 am
DTM: Apparently someone put a link to this post on some right wing echo chamber
Yah, Instapundit. Heard of it?
Its amazing how quickly you fascist lefties feel threatened when exposed to a venue that allows for feedback. Hey, after you shut down talk radio with your little totalitarian scheme, are you going to after FOX too? You should be ashamed of yourselves.
February 14th, 2009 at 5:19 am
It looks like some Republican members of the US House of Lords have loaded-up on juicy pork. Maybe now Specter can ask for more Comcast dough and reignite another NFL investigation.
February 14th, 2009 at 6:34 am
Earmarks are more than just political vote buyers: they are a drag on efficient government.
Typical earmarks do *not* have funds supplied with them to address the overhead of tracking and spending the funds. This, typically, costs the agency involved 10-15% of the amount to be spent. That overhead money is *not* in the earmark, thus the overehead for an agency must be stretched thinner to cover this spending that was not in their budget in the first place.
The overhead consists of following all the FAR (Federal Acquisition Regulations) and DFAR for Defense agencies. Those regulations have legal overhead, plus accounting overhead, and necessary time involved for tracking said funds. In addition even the lowest overhead funds, that being Grants, still require authorization and tracking, plus feedback from program managers and technical personnel (when that is involved). Even Grants must go through the Contracts shops as Grants are a form of Contract. Contract overhead is enormous, and no Contract shop in *any* agency likes earmarks as it places large additional burden on them, plus Congresscritters often want a particular group to get said funds and *that* is a sole source acquisition which requires agency justification. Thus Grants have lowest overhead and sole source acquisitions typically have the highest.
And Congresscritters don’t budget for that overhead, which means all the vital work of the agency now gets less accountability, less oversight and personnel time must now be allocated to a project that no one planned on.
It isn’t just politics, but efficient and accountable government: if you want the latter you do not want ‘earmarks’, but regular budget items with regular accountability and adjusted agency budgets for the overhead of those line items. Buying political votes, then, becomes the opposite of good government.
February 14th, 2009 at 6:34 am
Earmarks are more than just political vote buyers: they are a drag on efficient government.
Typical earmarks do *not* have funds supplied with them to address the overhead of tracking and spending the funds. This, typically, costs the agency involved 10-15% of the amount to be spent. That overhead money is *not* in the earmark, thus the overehead for an agency must be stretched thinner to cover this spending that was not in their budget in the first place.
The overhead consists of following all the FAR (Federal Acquisition Regulations) and DFAR for Defense agencies. Those regulations have legal overhead, plus accounting overhead, and necessary time involved for tracking said funds. In addition even the lowest overhead funds, that being Grants, still require authorization and tracking, plus feedback from program managers and technical personnel (when that is involved). Even Grants must go through the Contracts shops as Grants are a form of Contract. Contract overhead is enormous, and no Contract shop in *any* agency likes earmarks as it places large additional burden on them, plus Congresscritters often want a particular group to get said funds and *that* is a sole source acquisition which requires agency justification. Thus Grants have lowest overhead and sole source acquisitions typically have the highest.
And Congresscritters don’t budget for that overhead, which means all the vital work of the agency now gets less accountability, less oversight and personnel time must now be allocated to a project that no one planned on.
It isn’t just politics, but efficient and accountable government: if you want the latter you do not want ‘earmarks’, but regular budget items with regular accountability and adjusted agency budgets for the overhead of those line items. Buying political votes, then, becomes the opposite of good government.
February 14th, 2009 at 11:18 am
Yah, Instapundit. Heard of it?
No. There’s a good one called Instaputz though, is that it?
February 14th, 2009 at 3:19 pm
Since neither you nor any of the other liberals on this thread have offered substantive response to any of the comments that deviate from the orthodoxy on this site, your comment betrays some projection.
February 14th, 2009 at 4:57 pm
How did the dems get such a huge bill
out so quickly ? Prepared in advance?
Is this whole stimulus thing a set up?
Could not resist this comment I’m
an INSTA regular.
February 14th, 2009 at 11:48 pm
Ah yes, the CBO. Please note that the CBO also said the “stimulus” package is not needed to bring about an economic recovery, and that the long term effect of this package on the economy will be negative. Furthermore, it found that the actual cost of the stimulus over just the next ten years is likely well over $3 trillion dollars, given that expansions of entitlement programs are never repealed.
You can channel Keynes all you want, but direct government involvement will do nothing positive because the government cannot create wealth. FDR’s programs extended the Great Depression and made it far, far worse than it likely would have been, and Obama’s Hopeychangey Pork-a-thon will likely do the same thing.
The government is printing and borrowing money as fast as it can and dumping it all into the economy — trillions of dollars in “stimulus,” bailouts, and whatnot. The money will pool in various sectors of the economy for now, but it will eventually bring about the worst case of inflation this country has ever witnessed. Get your wheelbarrows ready, because you’ll need them to haul enough cash to the market to buy bread.
Oh, and please note that Fannie and Freddie are once again buying subprime mortgages. So yet again, the government is underwriting home purchases by people who can’t afford homes, thus restarting the insanity cycle that got us where we are. Apparently, “stuck on stupid” is just a way of life in Washington.
February 15th, 2009 at 12:06 am
OLDJAYPEE –
Having spent some time in that ether, I can describe very simply how the bill was constructed. Some weeks ago, when it was clear a stimulus bill was in the works. A call within the Democrat ranks was issued for inputs into the bill. There were probably some very simple guidelines, such as it must ’stimulate the economy’, ‘provide assistance to those affected by the recession’, ‘include infrastructure projects’, etc. At that point, every democrat congressman instructed their staffs to write drafts of language for their ideas on what that meant. In most cases this resulted in the pet projects they had been trying to champion for years, but with past budget constraints were never worthy of consideration. These were sent to Pelosi’s staff for compilation. After review, Pelosi’s staff then added some provisions that they thought would assist the bill through the process. They attempted to balance the overall bill with some tax cuts, perhaps aid to states, etc., then presented a summary of the package (probably in a 5 page power point presentation) to the speaker for approval. She may have done a little tweaking to the bill at a macro level. Add some of this, delete some of that. It was then distributed (at the 5 page power point level) to the democratic leadership to ensure there were no issues or omissions. After a few tweaks (no doubt with additional chunks of money) it was finalized. After these approvals, the complete bill was compiled (just a bunch of separate provisions written by congressional staffers stapled together with some binding language) and put forward for a vote. The result is as one would expect. There are provisions in this bill that no one, even the Speaker of the House, have reviewed in any detail. She, and the house leadership, have no idea what the ramifications of this bill are. As others examine the bill and ask questions, you see the house leadership responding in platitudes, claiming that overall it will help the economy, etc. At least half the time, they have no idea what the questions are about, since they haven’t read it either. They call their staff, demanding ‘talking points’ that allow them to appear intelligent in interviews with the press. Since the ‘details’ really don’t matter in this political process, objections must be squashed by any means to get the bill passed. They know that the longer the bill is examined, the more issues will arise, so time is of the essence. Remember, at this point, success is measured by a bill that passes, not that it is a bill that helps the country. They make the concessions they must to appease their allies (including President Obama who was a bystander in this process) and get it to a vote on the floor. The results is what you are now seeing. A hodgepodge of spending that is the result of years of pent up desires by a party out of power who’s political philosophy is one of government support to their constituents.
There was no overt plan to ‘expand the government’ or to ’spread the wealth’ or to ‘take over the private sector’. You give them too much credit. Remember, that 99 percent of the time, what appears to be a well thought out conspiracy or scheme by those in power, is merely incompetence.
February 15th, 2009 at 1:04 am
DTM,
Your childlike faith in the ability of politicians to run the economy better than the private sector would be charming if it were not so dangerous. The next time the government directly causes the economy to come out of a recession will be the first. Your claims about the efficacy of FDR’s programs are false, as most economists now understand.
As for how we will “pay off the debt,” your faith is once again misplaced. Even during the four years of surpluses in the 1990s, little to none of it went to pay off the national debt — Politicians always find ways that the money simply must be spent.
Furthermore, raising taxes in the midst of a recovery is exactly the wrong prescription. The problem with liberals is that they do not seem to understand that you can’t force people to act against their own self-interest. Raise taxes and you reduce economic output compared to what it would have been otherwise, simple as that. It reminds me of Bill Clinton and his silly “luxury tax” of 1993 when he was going to sock it to those lousy rich people by taxing their yachts and limos. Funny thing, the utterly predictable occurred and the rich simply stopped buying these things (or bought them overseas), so the only people hurt were the workers who made these products.
So now the politicians and lobbyists have dedicated over $3 trillion dollars of borrowed money to entitlements and pet projects, and little to none of it will ever be repaid.
As Margaret Thatcher once observed, “The only problem with socialism is that you eventually run out of other people’s money.”
February 15th, 2009 at 1:17 am
One more thing: That Bruce Bartlett piece you linked to gives the credit for ending the Great Depression to the deficit spending during WWII. In fact, Obama’s own chair of the Council of Economic Advisers is among the eonomists who have shown this was not the case. Even the huge expenditures of that long war did not end the Depression, as is discussed here:
http://reason.com/news/show/131661.html
February 15th, 2009 at 1:26 pm
The only reason debt as a percentage of GDP decreased under Clinton was 1) because of the tech boom, and 2) because of the newly-minted GOP Congress which, at the time, actually stuck to its ideology of fiscal responsibility.
But all this talk about debt compared to GDP is somewhat dumb. If I have a huge amount of personal debt and am continuing to borrow more money every year, the fact that my income is growing fast enough to barely reduce my debt-to-income ratio does not change the fact that I have massive debts that will need to be paid off eventually. And since I can not count on my income continuing to rise indefinitely, I better start paying off my damn debts.
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