I well remember the last time the Republicans rode into town to get our fiscal house in order and curb the growth of government. That was in 1994. Twelve years later, when our Republican heroes were themselves ridden out of town, they still hadn’t managed to eliminate the goddamned National Endowment for the Arts.
They did, however, cut its budget for a while — from $170 million to under $100 million, though it’s crept back up since then. The moral: If you want a lasting impact, don’t cut budgets. Cut agencies.
The NEA is, of course, small potatoes, but my point is that these guys never made a permanent debt in the small stuff, let alone the big stuff. This time around, maybe — just maybe — things will be different, especially if the Tea Party continues to hold some feet to the fire. With that in mind, here are a few bits of advice for the freshman class:
1. Like I said, cut agencies. And cut them in bunches, to dilute opposition. As I’ve said before on this blog, the department of commerce steals from workers and farmers to subsidize businesses; the department of agriculture steals from workers and businesses to subsidize farmers, and the department of labor steals from businesses and farmers to subsidize workers. Eliminate them all at once and every American will lose one friend and two enemies.
2. Do not let the deficit commission (or anyone else) snow you or the public into thinking that raising taxes is the moral equivalent of cutting spending. It’s not. It’s the moral equivalent of moving money from your savings account to your checking account. The taxpayers are the polity. Collectively, we own the U.S. Treasury. When you raise taxes, you move money from the private bank accounts we own to the public bank account we own. That’s not fiscal responsibility. It’s flimflam.
3. Quit using the tax system to encourage rich people to consume more. They consume enough already. In other words, quit taxing capital income. Not in dribs and drabs, but in one fell swoop. The quickest and cleanest way to do this is probably to eliminate all limits on IRA contributions (as well as eliminating the corporate income and inheritance taxes). (Other relevant posts are here, and here, here, here. )
4. ObamaCare sucks. But the old system was pretty sucky too. Don’t repeal ObamaCare until you’ve figured out what you’re going to replace it with. And get cracking on that.
5. I’d love to see some major changes in the Social Security system but do not mistake social security cuts for spending restraint, any more than you should mistake tax increases for spending restraint. Like a tax increase, a social security cut just moves money back and forth between private and public accounts; it doesn’t staunch the flow of government resource consumption.
6. Don’t get hung up on recession-fighting. I realize this is probably bad political advice, but it’s good policy advice. Certain pundits believe they’ve got a surefire recession cure, but even if they’re right, it doesn’t follow that the cure is worth the cost. And the fact that these pundits never (as far as I can see) address that question should make their advice quite irrelevant to policymakers. There are good reasons (I might blog about them soon) for thinking that most recession-fighting isn’t worth the cost, even when it works. The consequences of this year’s policy choices will be with us for a very long time. In the long run we’re all dead, but we’ve got a lot of living to do in the meantime.
7. Try not to nationalize any banks or auto companies. You’ve got the advantage of having a pretty easy act to follow.
8. Read what my commenters have to say. I feel sure they’ll be brilliant.