I enjoyed this headline, from earlier in the week, on the BuzzFeed website: “Obama Looks To Saddle Republicans With Blame For Debt Limit Fight”.That’s sort of like me saddling you with the blame for threatening to take my wallet. If a fight is instigated by one side, then that side is to blame for instigating the fight.
I’m not sure if Republicans would quibble with that logic, but they have claimed that their actions are a necessary means to an essential end: deficit reduction.
Of course, if Republicans were truly interested in deficit reduction as their top priority, they could have signed on to the Simpson-Bowles plan, or allowed all of the Bush tax cuts to expire, or let the sequester take effect.
Their belligerence in pushing for deficit reduction on their own terms underlines a central misconception of the fiscal debate: namely, that it is a debate over the deficit.
There are many pundits out there who treat the deficit as if it were a simple maths problem that could be solved if only the Republicans and Democrats were a bit more cordial. Such a simplistic viewing of the challenge allows self-righteous people to call for real bipartisan solutions, while offering nothing of substance (I say this only somewhat self-consciously).
It allows for the public exaltation of the non-partisan Simpson-Bowles plan, despite a general ignorance of that plan’s details. It allows for the formation of a group like Fix The Debt, which seems to have the very popular goal of fixing the debt. Hear, hear, let’s fix this thing already!
But life is not so simple, nor is America’s budget. The true nature of the debt conversation was perhaps best captured by Matt Yglesias last year when he asked Fix The Debt about its advocacy of lower tax rates, a solution that would seemingly add to the problem. The group fumbled its response leading Mr Yglesias to sagely conclude
[I]f you saw a bunch of Quakers running around in a panic about the national debt pushing a plan to reduce the debt by cutting military spending, and then loudly objecting to all debt-reduction plans that don’t slash military spending you’d rapidly reach the conclusion that the Quakers don’t actually care about the national debt. They’re just pacifists.
Something similar is true of most members of Congress. They may like to think of themselves as deficit hawks and others as deficit doves; in fact, they are a motley crew of tax cutters, defence spenders, entitlement protectors and so on.
That’s because tax cuts have a constituency (those who will benefit), entitlements have a constituency (those receiving them) and defence spending has a constituency (defence contractors and their rah-rah chorus).
Fixing the deficit doesn’t really have a constituency, as nobody benefits directly. Even those voters who claim to be most concerned about the deficit are likely viewing it as a proxy for taxes, jobs or entitlements. Republicans, who tend to express more concern about deficits, often equate it to big government. But big governments have been run with small or no deficits, and small governments have been run with big deficits.
As a result, fixing the debt is pretty damn hard. The argument is drawn out over multiple fronts. In some cases, the combatants can’t even agree which fronts to meet on, or when the battle will be held.
(Republicans have said they will not discuss taxes. Many Democrats believe entitlement reform should be put off.) Even the cause of war is in dispute—is the economy troubled by a lack of aggregate demand, or uncertainty over the deficit? Is American credit-worthiness strong, or are we going the way of Greece?
Given the intricacy of the problem, it seems rather naive to suggest a little more comity would lead to compromise solutions that are obvious if only politicians took off their partisan blinders. These vapid pleas for harmony not only ignore the complexity of the fight, but also act as though the latest hostilities were legitimate and not a hostage grab perpetrated by one side.
Unfortunately, little is likely to change as the current battle unfolds. The most likely outcome of this mess is a dirty compromise that leaves very serious people calling for more cooperation in Washington, and partisans calling for higher stakes in the next fight.
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