If at First Your Policy Fails, Try, Try Again

Michael Cohen wrote a piece for us Tuesday on how America has become increasingly ungovernable due to voters' disregard for basic arithmetic. If you take money out of the federal Treasury, via tax cuts, and you increase spending—via, say, a constant, wasteful military buildup, launching wars of choice, expanding entitlement spending, and stabilizing and stimulating the economy to avert a Great Depression—you will increase deficits and accrue debt.

Some would argue that deficits are not as bad as we make them out to be, and that would be a legitimate debate worth having. But the same voters who demand tax cuts while living on government pensions and health care, and the same politicians who pander to them by cutting taxes, doling out tax credits, and ramping up military spending, have been inveighing against fiscal irresponsibility with increasing zealtory since President Obama took office.

You think I'm talking about tea partiers, FOX News shouting heads, and Republicans in Congress? Actually, the latest politicians to realize that making internal sense with their policies is unnecessary are Democrats, and they include Obama himself.

Consider Harold Ford Jr., carpet-bagger extraordinaire. After failing to win a Senate seat in Tennessee under ideal conditions by running to the right of Joe Lieberman, Ford moved to New York to rake in the bucks in finance (a great résumé to run for office on these days). Sensing vulnerability in Democratic incumbent Sen. Kirsten Gillibrand (although New York Democrats generally are suspicious of Gillibrand from the left, not the right), Ford has started sending out feelers for a primary challenge.

On Monday The New York Times lent its op-ed page, the best and most prestigious such venue in the country, if not the world, to Ford to lay out his agenda. What did this pragmatic outsider offer? If you guessed tax cuts and deficit reduction, you're right! "President Obama and the Democratic Party need to shift attention away from health care and toward a bold effort to create jobs, improve the economy and rein in the size of government," writes Ford, ignoring the fact that creating jobs and improving the economy requires investing money in the economy. That, in turn, means the government must do so by spending money, which runs counter to reining in the size of government.

Ford then lays out "four simple steps," which start as follows: "First, cut taxes for businesses—big and small." Hmm, I wonder where this is going. "Finally, we need to address budget deficits now rather than waiting for some ideal future economic situation." Nevermind that basic economic history teaches us that the government must use deficit spending to boost economic growth during downturns and wait for better, if not ideal, economic situations to raise taxes and cut spending to create a surplus and pay down the debt.

Wondering how Ford intended to reduce budget deficits by taking money out of the Treasury via tax cuts, which is left unexplained in his piece, I called Ford's spokesman Davidson Goldin. How, exactly, does Ford propose to cut the deficit? Goldin could offer no details whatsoever except for the bipartisan commission on deficit reduction that President Obama has endorsed. That commission will likely argue for reducing spending on entitlement programs such as Medicare and Social Security, which is ballooning with the aging population. Considering that Democrats have made "Save Social Security First" a cornerstone of their platform for at least a decade and that Republicans demagogued the health-care reform bill for cutting Medicare spending, it is extremely unlikely that any major such action will be taken.

Without cutting entitlement spending it is virtually impossible to reduce the deficit while cutting taxes, so what other brilliant ideas did Ford have in mind for squaring that circle, I asked Goldin? He had no answer, other than a highly speculative prediction that cutting taxes would lead to economic growth, which would, in turn, fill the federal coffers. Ronald Reagan subscribed to the same theory, and you can see how well that worked out. (Deficits tripled during Reagan's tenure.)

But Harold Ford Jr. is just an insurgent primary candidate for statewide office—it's not like he's making policy in the White House, right? Actually, it turns out he might as well be. First, the Obama administration said on Monday evening that they will propose a freeze on domestic discretionary spending, for the purposes of slowing the growth of the deficit. That category of spending, mind you, does not include entitlement programs, nor the military, nor national-security expenditures. Obama's proposal, if passed by Congress, would reduce a projected $9 trillion in debt over the next decade by all of $250 billion.

So, if that's just small-bore signaling, what is Obama's substantive big idea? He's cutting taxes!

I think we had all better move to Oregon, or else we'll end up like California.

If at First Your Policy Fails, Try, Try Again | Analysis