Good reading from David Frum here.


The Tea Party serves us much better as a valuable gadfly, forcing the two parties who can actually govern this country to recognize fiscal restraint and the limitations of government. Apparently, neither major political party is capable of keeping that message in mind.

As a paradigm of governnance, though, the Tea Party is inane. Their candidates promise both balanced budgets and tax cuts. Really? They have $1.3 trillion in spending cuts to offer? I’d like to see the list. I’d like to see how those spending cuts will be implemented without pushing our economy into a nuclear winter of a depression, leaving us yearning for 1930, or at least 2008.

Their candidates promise to return government to its proper constitutional boundaries. Really? As just one example, Alaskan Senate candidate Joe Miller says unemployment benefits are unconstitutional. Fair enough, but why stop there. The same reasoning renders most of our current government apparatus unconstitutional: Social Security, Medicare, Medicaid, student loans, housing programs, energy assistance programs, science funding, farm subsidies, food inspections, drug approvals, the space program, aid to education. So, just like “balance the budget and cut taxes,” this talk of proper constitutional boundaries leads to an absurdist model of governance.

I say, let’s take the sober message of the Tea Party — which I define to be, live within our means — and discard the actual Tea Party candidates. We don’t have time for this foolishness.

You’ve seen it on 1000 websites by now: Jan Brewer’s long, awkward pause during her opening remarks in the gubernatorial debate in Arizona. That’s a little bit embarrassing, I suppose, especially considering that those were her prepared comments. Really, though, so what? We all get tongue-tied, and for most of us we don’t have live television cameras pointed at our face to increase the pressure. I hardly think her brief confusion says anything about her qualifications for re-election.

Here’s what I find astonishing, though. Moments before her stumble, she proclaimed, “We have cut the budget. We have balanced the budget.” WTF? No, “we” haven’t. According to the state’s own reports, if you take out the budget tricks, the budget shortfall in the current FY2011 will be $1.691 billion (see page 17). That is 20% of the state’s total spending. The deficit remains in the $1 to $2 billion annual range in the projected years ahead.

To be perfectly fair, the actual budget deficit in FY2011 is projected to be between “zero and $1.2 billion,” which is a better picture than the structural deficit of $1.691 billion, and which may provide Gov Brewer with a technically defensible claim to balancing the budget. What is the difference between the two projections? Two things. One is federal stimulus money, and the other is the governor’s sales tax increase, which lasts for three years. Do y’all hear what I’m saying? The only reason the governor can lay even a remotely plausible claim to balancing the budget is federal stimulus money and a tax increase. That’s right: federal stimulus money and a tax increase. One more time:  federal stimulus money and a tax increase. Tea Party people, take arms!!!

The media? They think the important news here is 13 seconds of dead air.

My simple federal fiscal policy formula:

  1. Accept that these severe short-term federal deficits are an unavoidable consequence of many decades of spending growth, several decades of tax cutting, and the severe recession. It is unwise to sharply rein in these deficits until the economy is stably back on its feet. I define that as when job creation reaches the level needed to start making serious inroads into the unemployment rate — i.e., private sector job creation in the 250,000 per month range.
  2. Courageously attack long term deficits by starting to raise the Social Security/Medicare retirement age (but not for near-term retirees) and by tightening means-testing for Medicaid so that it is restored to its original purpose: a safety net for the indigent, not a middle class entitlement.
  3. In between, restore fiscal sanity by a formula of $2 of spending cuts matched to every $1 of tax increases. Real math, not Washington math.

Is that so hard? Apparently so, because I have not heard a single congressional candidate in this election cycle — not Republicans, not Democrats, not Tea Party folks, not libertarians — not one who espouses anything resembling a coherent fiscal message. This would be the time to do it, too, because for the first time in memory, the electorate seems to be ready to hear that entitlements need to be reformed. I don’t know about tax increases though. Most people still seem in denial about that stone-cold reality.

I have been saying for years that the orthodoxy of tax cutting that originated back in the Reagan administration is as responsible for today’s vast deficits and federal debt as over-spending. After all, say what we will about FDR and the New Deal, or Johnson and the New Society — at least through the 1970s we pretty much paid for the government we demanded. Jimmy Carter left office with less than $1 trillion in federal debt. Since then, though, it has exploded, driven by both steadily rising spending and by tax cutting measures. Debt doubled under Reagan, and nearly did so again under Bush 43. By the time we get to Obama, debt is piling up at the rate of more than $1 trillion a year.

As a result, I have been highly critical of Tea Party and other right-wing types who espouse a “cut spending, cut taxes” view of fiscal policy. I believe that deficits and the resulting debt are the great threat to our future. Tax cuts in this environment are not merely illogical, they are irresponsible. If your family is deeply in debt, you work to cut spending and raise your income. You don’t cut spending and ask your boss to cut your pay. We cannot in good conscience cut today’s taxes, which raises the deficits and puts an even greater burden on future generations.

Now, along comes a front page piece in USA Today, of all places. The headline reads “Tax bills in 2009 at lowest level since 1950“. On average, 9.2% of our personal income is paid in taxes at all levels of government. Our taxes are at their lowest level in 60 years. Let’s have that sink in: lowest in 60 years. What could possibly be the argument for cutting taxes even further than a 60-year low when we are saddling our children and children’s children with more than $1 trillion in debt by the year?

Do you know what is “conservative”? Conservative is paying for what you buy, and not acting like a god-damned socialist and expecting someone else to pay for it instead. Spending cuts and tax increases, please.

Let’s imagine the most improbably successful outcome imagineable for the tea party movement. Suppose they actually managed to obtain a majority in Congress, or at least to unseat the Democratic majority in favor of Republicans. What happens when, two years later, voters see that spending has increased again, and federal debt has continued to rocket upward? To paraphrase Mr. Grayson from Kentucky, what happens when people learn that honking horns does not solve traffic? The Tea Party movement seems to be based on the notions that government spending can be controlled without shrinking popular programs, and that government debt can be curtailed without increasing taxes. Both are absurd fantasies. So is the idea that Republicans have any intention of reducing spending or reducing federal debt. What happens when that lesson is learned?