Wednesday, October 17, 2012


I am still looking for a way to give President Obama the benefit of the doubt.

I’m doing my best to understand how he plans to deal with the looming fiscal calamity if he gets a second term. As far as I can tell, his plan pretty much consists of maintaining the status quo in government spending as much as possible and raising taxes on the highest earners. Full stop.

The problem is that it doesn’t add up. Or, as he and the vice-president have liked to say since Bill Clinton’s stem-winder at the Democratic convention, it’s math, it’s arithmetic.

The president warns that Mitt Romney’s policies would amount to a return to the policies that got us in the mess in the first place. But that doesn’t sound right. Romney is proposing pro-growth policies which, historically, have added revenues to government coffers. Fiddling with tax rates doesn’t affect the revenue stream as much as good old-fashioned economic growth.

It seems to me that the simple way to arrive at the best policies is to look back at what policies were in place during our periods of highest widespread prosperity. That would be (first) the Clinton administration and (second) the Reagan administration. Both were characterized by trimming the growth of government spending. (Remember welfare reform under Clinton?) Importantly, these were also periods when the tax code was fairly stable so businesses could plan and hire comfortably. Under Obama businesses have watched things lurch from one short-term stop-gap measure to another, with no assurance of where tax policy will wind up. No wonder there is so much money not being invested while everyone waits for the perpetual uncertainty of the Obama presidency to finally resolve itself.

So why doesn’t every president simply emulate the policies that were in place under Clinton (and, it should be added, a Republican Congress)? Beats me. When I try to read between the lines, I get the sense that Democrats think they can do better than just copy Clinton-era policies. That there is a better way to spread prosperity throughout all of society. My first question is, where is your historical precedent? Point me to the country and era that demonstrate the viability of your policies. The problem is, there is no time and place to point to that exceeds the general standard of living of America during the last two decades of the 20th century. Unfortunately, the precedents for current policies that do come to mind tend to be countries like Greece and Argentina.

That means what Democrats want to undertake is basically an experiment. They want to use the United States as a laboratory to see how much better they can make things by putting their theories in practice. That is, of course, not without considerable risk—considering all the failed economic experiments we have seen around the world over the past century or so.

Am I being too cautious? Maybe. When I was younger, I was more inclined to see grand new ideas tried, never mind the risks. Now I’m at a point in my life when my first thought is of all the people just trying to get by and earn a living. They don’t need or want to become collateral damage in someone’s grand experiment.

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