Goodbye Keynes, Hello Coolidge : GORE WANTS TO KEEP SHRINKING GOVERNMENT DEBT. HE ARGUES THAT FREED-UP PRIVATE CAPITAL WILL BENEFIT ALL--WHAT USED TO BE CALLED 'TRICKLE DOWN' ECONOMICS

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Paying off the national debt used to be an obsession of Calvinist fundamentalists on the fringes of the Republican Party, but this year it is the boldest banner held aloft by the Democratic Party's presidential nominee. If Al Gore is taken at his word, his presidency will amass trillions of dollars in extra revenue and devote most of it to paying down the federal debt. That would represent a very conservative agenda--and an ideological sea change for the Democrats--but Gore and his economic advisers have persuaded themselves that the New Economy is real and changes everything. A conservative fiscal policy, they assert, is now the progressive thing to do. Skeptics, myself included, would say more darkly: Goodbye Keynes, hello Coolidge.

Some Gore supporters, including some liberals, wave off any criticism of Gore's strategy because they essentially don't believe it's real. They figure that either the $3.4 trillion in federal operating surpluses projected for the next decade will never materialize or the Vice President's devotion to debt reduction is simply clever positioning for the campaign. The stratagem was originated by Bill Clinton in early 1999 to stymie Republican demands for huge tax cuts, and Gore uses the issue in the same way. It also gives him protection against the "liberal big spender" label. The political benefits are real enough, but the evidence suggests that Gore is also a true believer. His advisers insist we have entered a new era, in which fueling financial markets with abundant investment capital takes precedence over major government spending programs. If the insights of John Maynard Keynes are still relevant to fiscal policy, Gore's pay-down-the-debt program could do great damage to economic prosperity.

For better or worse, Gore is the inheritor. As a candidate, he is still …