Having Fiscal Policy Both Ways; Parties Struggle to Please Voters with More Spending and Less Spending
Byline: Jeffrey H. Birnbaum, SPECIAL TO THE WASHINGTON TIMES
Voters must be feeling whiplash. This summer, the president and Congress rushed to reduce spending to tame the federal budget deficit. President Obama also pushed to increase taxes.
This autumn, the president will be pushing spending increases and both parties want tax cuts.
What? How can official Washington propose policies 180 degrees different than those it advanced a month earlier? Welcome to the pre-election silly season. Consistency has never been any politician's strength, but complete reversals are unusual.
The nation's long-running economic woes, however, have transformed silliness into absurdity. Decision-makers want two things they can't have at the same time. They want to rein in annual deficits because the size of the debt has gotten out of hand. Like almost every industrialized nation, the United States has borrowed more than it can handle and its finances have reached a precarious state.
At the same time, political leaders want to stimulate the economy in order to create more jobs. Unemployment is a nagging problem that must be dealt with or else social unrest - and political upheaval - could result.
But the policy prescriptions for stimulating the economy are exactly the opposite of what would be needed to stanch the red ink. Job creation requires more federal spending and less taxing. Deficit reduction requires less spending and more taxing. How can we do both?
But that never stopped the people in our nation's capital. Get ready, America, to be bamboozled again.
Politicians of both parties are about to have things both ways. And in the end, the hypocrisy will only make things worse. Much of the long-overdue progress on trimming the deficit will be undercut. Tax cuts and infrastructure banks will make the debt problem worse. But fiscal limits still remain, so there's not much the politicos can do to get the economy growing robustly again.
The likely result: voter dissatisfaction and major electoral change. …