A Country in Denial About Its Fiscal Future
By Robert Samuelson
WASHINGTON -- There are moments when our political system, whose essential job is to mediate conflicts in broadly acceptable and desirable ways, is simply not up to the task. It fails. This may be one of those moments. What we learned in 2011 is that the frustrating and confusing budget debate may never reach a workable conclusion. It may continue indefinitely until it's abruptly ended by a severe economic or financial crisis that wrenches control from elected leaders.
We are shifting from "give away politics" to "take away politics." Since World War II, presidents and Congresses have been in the enviable position of distributing more benefits to more people without requiring ever-steeper taxes. Now, this governing formula no longer works, and politicians face the opposite: taking away -- reducing benefits or raising taxes significantly -- to prevent government deficits from destabilizing the economy. It is not clear that either Democrats or Republicans can navigate the change.
Our political system has failed before. Conflicts that could not be resolved through debate, compromise and legislation were settled in more primitive and violent ways. The Civil War was the greatest and most tragic failure; leaders couldn't end slavery peacefully. In our time, the social protests and disorders of the 1960s -- the civil rights and anti-war movements and urban riots -- almost overwhelmed the political process. So did double-digit inflation, peaking at 13 percent in 1979 and 1980, which for years defied efforts to control it.
The budget impasse raises comparable questions. Can we resolve it before some ill-defined crisis imposes its own terms? For years, there has been a "something for nothing" aspect to our politics. More people became dependent on government. From 1960 to 2010, the share of federal spending going for "payments to individuals" (Social Security, food stamps, Medicare and the like) climbed from 26 percent to 66 percent. Meanwhile, the tax burden barely budged. In 1960, federal taxes were 17.8 percent of national income (gross domestic product). In 2007, they were 18.5 percent of GDP.
This good fortune reflected falling military spending -- from 52 percent of federal outlays in 1960 to 20 percent today -- and solid economic growth that produced ample tax revenues. Generally modest budget deficits bridged any gap. But now this favorable arithmetic has collapsed under the weight of slower economic growth (even after a recovery from the recession), an aging population (increasing the number of recipients) and high health costs (already 26 percent of federal spending). Present and prospective deficits are gargantuan.
The trouble is that, while the economics of give away policies have changed, the politics haven't. Liberals still want more spending, conservatives more tax cuts. (Although the tax burden has stayed steady, various "cuts" have offset projected increases and shifted the burden.) With a few exceptions, Democrats and Republicans haven't embraced detailed take away policies to reconcile Americans' appetite for government benefits with their distaste for taxes. President Obama has provided no leadership. Aside from Rep. Paul Ryan, chairman of the House Budget Committee, few Republicans have.
No one wants to take away; it's more fun to give. All 2011's budget feuds -- over the debt ceiling, the supercommittee, the payroll tax cut -- skirted the central issues. There's a legitimate debate about how fast deficits should be reduced to avoid jeopardizing the economic recovery, notes Charles Blahous, a White House official in the George W. Bush Administration. But the long-term budget problem, as he says, stems from Social Security, Medicare and other health programs.
Any resolution of the budget impasse must repudiate, at least partially, the past half-century's politics. Conservatives look at the required tax increases and say: "no way." Liberals look at the required benefit cuts and say: "no way."
Each reverts to scripted evasions. Liberals imply (wrongly) that taxing the rich will solve the long-term budget problem. It won't. For example, the Forbes 400 richest Americans have a collective wealth of $1.5 trillion. If the government simply confiscated everything they own, and turned them into paupers, it would barely cover the one-time 2011 deficit of $1.3 trillion. Conservatives deplore "spending" in the abstract, ignoring the popularity of much spending, especially Social Security and Medicare.
So the political system is failing. It's stuck in the past. It can't make desirable choices about the future. It can't resolve deep conflicts.
An alternative theory is that we're muddling our way to a messy consensus. All the studies and failed negotiations lay the groundwork for ultimate accommodation. Perhaps. But it's just as likely that this year's partisan scapegoating implies more partisan scapegoating. Political leaders assume that financial markets won't ever choke on U.S. debt and force higher interest rates, stiff spending cuts and tax increases.
28 December, 2011
03 December, 2011
Mitt vs. Newt
By Charles Krauthammer
It’s Iowa minus 32 days, and barring yet another resurrection (or event of similar improbability), it’s Mitt Romney vs. Newt Gingrich. In a match race, here’s the scorecard:
Romney has managed to weather the debates unscathed. However, the brittleness he showed when confronted with the kind of informed follow-up questions that Bret Baier tossed his way Tuesday on Fox’s “Special Report” — the kind of scrutiny one doesn’t get in multiplayer debates — suggests that Romney may become increasingly vulnerable as the field narrows.
Moreover, Romney has profited from the temporary rise and spontaneous combustion of Michele Bachmann, Rick Perry and Herman Cain. No exertion required on Romney’s part.
Enter Gingrich, the current vessel for anti-Romney forces — and likely the final one. Gingrich’s obvious weakness is a history of flip-flops, zigzags and mind changes even more extensive than Romney’s — on climate change, the health-care mandate, cap-and-trade, Libya, the Ryan Medicare plan, etc.
The list is long. But what distinguishes Gingrich from Romney — and mitigates these heresies in the eyes of conservatives — is that he authored a historic conservative triumph: the 1994 Republican takeover of the House after 40 years of Democratic control.
Which means that Gingrich’s apostasies are seen as deviations from his conservative core — while Romney’s flip-flops are seen as deviations from . . . nothing. Romney has no signature achievement, legislation or manifesto that identifies him as a core conservative.
So what is he? A center-right, classic Northeastern Republican who, over time, has adopted a specific, quite bold, thoroughly conservative platform. His entitlement reform, for example, is more courageous than that of any candidate, including Barack Obama. Nevertheless, the party base, ostentatiously pursuing serial suitors-of-the-month, considers him ideologically unreliable. Hence the current ardor for Gingrich.
Gingrich has his own vulnerabilities. The first is often overlooked because it is characterological rather than ideological: his own unreliability. Gingrich has a self-regard so immense that it rivals Obama’s — but, unlike Obama’s, is untamed by self-discipline.
Take that ad Gingrich did with Nancy Pelosi on global warming, advocating urgent government action. He laughs it off today with “that is probably the dumbest single thing I’ve done in recent years. It is inexplicable.”
This will not do. He was obviously thinking something. What was it? Thinking of himself as a grand world-historical figure, attuned to the latest intellectual trend (preferably one with a tinge of futurism and science, like global warming), demonstrating his own incomparable depth and farsightedness. Made even more profound and fundamental — his favorite adjectives — if done in collaboration with a Nancy Pelosi, Patrick Kennedy or even Al Sharpton, offering yet more evidence of transcendent, trans-partisan uniqueness.
Two ideologically problematic finalists: One is a man of center-right temperament who has of late adopted a conservative agenda. The other is a man more conservative by nature but possessed of an unbounded need for grand display that has already led him to unconservative places even he is at a loss to explain, and that as president would leave him in constant search of the out-of-box experience — the confoundedly brilliant Nixon-to-China flipperoo regarding his fancy of the day, be it health care, taxes, energy, foreign policy, whatever.
The second, more obvious, Gingrich vulnerability is electability. Given his considerable service to the movement, many conservatives seem quite prepared to overlook his baggage, ideological and otherwise. This is understandable. But the independents and disaffected Democrats upon whom the general election will hinge will not be so forgiving.
They will find it harder to overlook the fact that the man who denounces Freddie Mac to the point of suggesting that those in Congress who aided and abetted it be imprisoned, took $30,000 a month from that very same parasitic federal creation. Nor will independents be so willing to believe that more than $1.5 million was paid for Gingrich’s advice as “a historian” rather than for services as an influence peddler.
Obama’s approval rating among independents is a catastrophically low 30 percent. This is a constituency disappointed in Obama but also deeply offended by the corrupt culture of the Washington insider — a distaste in no way attenuated by fond memories of the 1994 Contract with America
My own view is that Republicans would have been better served by the candidacies of Mitch Daniels, Paul Ryan or Chris Christie. Unfortunately, none is running. You play the hand you’re dealt. This is a weak Republican field with two significantly flawed front-runners contesting an immensely important election. If Obama wins, he will take the country to a place from which it will not be able to return (which is precisely his own objective for a second term).
Every conservative has thus to ask himself two questions: Who is more likely to prevent that second term? And who, if elected, is less likely to unpleasantly surprise?
By Charles Krauthammer
It’s Iowa minus 32 days, and barring yet another resurrection (or event of similar improbability), it’s Mitt Romney vs. Newt Gingrich. In a match race, here’s the scorecard:
Romney has managed to weather the debates unscathed. However, the brittleness he showed when confronted with the kind of informed follow-up questions that Bret Baier tossed his way Tuesday on Fox’s “Special Report” — the kind of scrutiny one doesn’t get in multiplayer debates — suggests that Romney may become increasingly vulnerable as the field narrows.
Moreover, Romney has profited from the temporary rise and spontaneous combustion of Michele Bachmann, Rick Perry and Herman Cain. No exertion required on Romney’s part.
Enter Gingrich, the current vessel for anti-Romney forces — and likely the final one. Gingrich’s obvious weakness is a history of flip-flops, zigzags and mind changes even more extensive than Romney’s — on climate change, the health-care mandate, cap-and-trade, Libya, the Ryan Medicare plan, etc.
The list is long. But what distinguishes Gingrich from Romney — and mitigates these heresies in the eyes of conservatives — is that he authored a historic conservative triumph: the 1994 Republican takeover of the House after 40 years of Democratic control.
Which means that Gingrich’s apostasies are seen as deviations from his conservative core — while Romney’s flip-flops are seen as deviations from . . . nothing. Romney has no signature achievement, legislation or manifesto that identifies him as a core conservative.
So what is he? A center-right, classic Northeastern Republican who, over time, has adopted a specific, quite bold, thoroughly conservative platform. His entitlement reform, for example, is more courageous than that of any candidate, including Barack Obama. Nevertheless, the party base, ostentatiously pursuing serial suitors-of-the-month, considers him ideologically unreliable. Hence the current ardor for Gingrich.
Gingrich has his own vulnerabilities. The first is often overlooked because it is characterological rather than ideological: his own unreliability. Gingrich has a self-regard so immense that it rivals Obama’s — but, unlike Obama’s, is untamed by self-discipline.
Take that ad Gingrich did with Nancy Pelosi on global warming, advocating urgent government action. He laughs it off today with “that is probably the dumbest single thing I’ve done in recent years. It is inexplicable.”
This will not do. He was obviously thinking something. What was it? Thinking of himself as a grand world-historical figure, attuned to the latest intellectual trend (preferably one with a tinge of futurism and science, like global warming), demonstrating his own incomparable depth and farsightedness. Made even more profound and fundamental — his favorite adjectives — if done in collaboration with a Nancy Pelosi, Patrick Kennedy or even Al Sharpton, offering yet more evidence of transcendent, trans-partisan uniqueness.
Two ideologically problematic finalists: One is a man of center-right temperament who has of late adopted a conservative agenda. The other is a man more conservative by nature but possessed of an unbounded need for grand display that has already led him to unconservative places even he is at a loss to explain, and that as president would leave him in constant search of the out-of-box experience — the confoundedly brilliant Nixon-to-China flipperoo regarding his fancy of the day, be it health care, taxes, energy, foreign policy, whatever.
The second, more obvious, Gingrich vulnerability is electability. Given his considerable service to the movement, many conservatives seem quite prepared to overlook his baggage, ideological and otherwise. This is understandable. But the independents and disaffected Democrats upon whom the general election will hinge will not be so forgiving.
They will find it harder to overlook the fact that the man who denounces Freddie Mac to the point of suggesting that those in Congress who aided and abetted it be imprisoned, took $30,000 a month from that very same parasitic federal creation. Nor will independents be so willing to believe that more than $1.5 million was paid for Gingrich’s advice as “a historian” rather than for services as an influence peddler.
Obama’s approval rating among independents is a catastrophically low 30 percent. This is a constituency disappointed in Obama but also deeply offended by the corrupt culture of the Washington insider — a distaste in no way attenuated by fond memories of the 1994 Contract with America
My own view is that Republicans would have been better served by the candidacies of Mitch Daniels, Paul Ryan or Chris Christie. Unfortunately, none is running. You play the hand you’re dealt. This is a weak Republican field with two significantly flawed front-runners contesting an immensely important election. If Obama wins, he will take the country to a place from which it will not be able to return (which is precisely his own objective for a second term).
Every conservative has thus to ask himself two questions: Who is more likely to prevent that second term? And who, if elected, is less likely to unpleasantly surprise?
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