Sunday, May 25, 2008

No, We Don't Need Another Perot....

Michael O'Hanlon and a Alice Rivlin take on domestic politics and the budget.
We hear that Ralph Nader is running again, but the third-party candidate we need is Ross Perot. In 1992, with his squeaky voice and endless charts, Perot focused attention on the rising federal deficit. His warnings helped keep the major-party candidates from talking budgetary nonsense.
Well, whatever credit we can extent to Perot for bringing attention to the budget, it's not like the deficit and massive national debt are a state secret.

For now, let's play along and assume that the Perot candidacy was truly about balanced budgets, and not about dissatisfaction with the major parties. We can overlook the fact that the poorly articulated Perot platform allowed voters to project their own wishes and desires for the country onto Perot, as evidenced by the collapse of the "Reform Party" pretty much the moment it tried to form a coherent platform. And of course, we'll overlook the fact that Perot didn't win.
For all of their impressive qualities, this year's presidential candidates are woefully short on fiscal prudence. And the next president will face two daunting budget problems. The winner will inherit a large deficit resulting from a weak economy, an expensive war and the persistent political inclination to spend more and tax less. The bigger challenge? Promises made to the growing population of retirees as health-care spending continues to soar.
So they want to resurrect a 1992-era candidacy that promised health care reforms and could lead to a balanced budget? That (despite the failure of his attempt at health care reforms) was Bill Clinton, not Ross Perot. As for promising tax increases, how did Alice Rivlin, view tax increases back in 2001? She saw George H.W. Bush's tax increases as having constituted "political suicide". That's political suicide after being elected, in contrast with Walter Mondale's politically suicidal promise to raise taxes during an election. Like it or not, the odds of having a viable candidate emerge and promise tax increases to cover O'Hanlon's favorite expenditure, the military, plus the cost of trying to stabilize health care cost and (for the two of three candidates who care about the issue) broadening health insurance coverage to most or all Americans? About zero percent.

I'm not entirely clear on what O'Hanlon and Rivlin see as the solution, other than a massive tax increase. It's reasonable to assume that O'Hanlon, a leading cheerleader of the Iraq war and a long-time proponent of military spending, would oppose saving money by ending the war or limiting military spending. They don't say, "candidates should promise to slash Social Security, Medicare and Medicaid, and continue to decline to invest in the nation's crumbling infrastructure", another platform pretty much guaranteed to bring about a crushing defeat in November. What effect do they believe a new Perot would have on this election?

As for trying to elicit a promise not to make the deficits worse, Rivlin has previously noted that deficit spending can boost a troubled economy - I'll grant that she's been arguing that the Bush Administration has been fiscally irresponsible, but is it truly best to demand restraint now, such that yet again we see a Reagan/Bush/Bush-style massive deficit coupled with massive accumulation of wealth among the richest Americans, followed by the tired excuse the minute the Democrats take power, "We can't afford to help you."

I'll also share an annoyance about analysts like O'Hanlon, who seem to want fiscal responsibility only when their own budgetary priorities are not at stake. He's happy to tell us that we can't afford health care reform without a massive boost in tax revenues, but where's his column explaining how we similarly can't afford to toss $120+ billion per year into the fiscal black hole commonly known as the Iraq War?

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