Hassett then reveals his entire column to be a sick joke by proclaiming this bit of "good news":One reason the increase [in spending] is so dramatic is the mystery of compounding. Each year, Congress passed pork-laden expenditure bills, which became part of the long-run baseline the minute they became law. Each time that the federal government wasted a billion dollars, it created budget space to waste $1 billion again and again, ad infinitum.
That’s perhaps the scariest fact about next year’s budget. The skyrocketing spending of 2009 will be the CBO baseline for every year after that. It will be easy to provide health care to everyone; the budget space will be blocked out. Indeed, Congress can spend with impunity in years to come, covered by the protective shroud of the CBO baseline that this year delivers. We can ride big government spending and trillion-dollar deficits all the way to 2017, when the Social Security trust fund itself starts running deficits.
This year may establish a government-spending black hole with gravity strong enough to suck the U.S. economy over the event horizon. Such a spending path has two possible endgames. Neither is pretty.
The Federal Reserve could print enough money to accommodate all of that debt, in which case the dollar will collapse and the U.S. will be looking at a South-America-style run on its debt.Or the U.S. government could get its fiscal act in order with higher taxes. For that to happen, income taxes would approximately have to double.
While advocates of Keynesian-style stimulus are correct that this economy is terrible enough to warrant dramatic action, it is hard to understand how such a fiscal path might help. So what if second-quarter gross domestic product blips up a little bit? What business is going to expand its operations with the mother of all tax hikes peeking over the horizon? If government spending provided such a wonderful boost to the economy, we would be in Nirvana already.
If we want to create optimism about our future, we need to provide a reason. Putting a ring road around every city in the U.S. will not accomplish that. The only sensible path is for the U.S. to put its long-term fiscal house in order. Without that, this year’s stimulus will likely be a historic flop.
The good news is that a bipartisan group of senators, led by Democrat Kent Conrad of North Dakota and Republican Judd Gregg of New Hampshire, is on the right track. Their idea is for Congress to empower a commission to make the tough choices about future benefits and taxes to restore sanity to the U.S. budget outlook, and then to fast-track the commission’s recommendations to an up-or-down vote. If Congress fails to take Conrad and Gregg seriously, we may all be headed for the bread line.
A Commission? No. A bipartisan Commission. Well, the timing is certainly right, what with a new Democrat president, who merely holds the entire hope of the world in his uncalloused hands, about to take his seat in the Oval Office and a Democrat-controlled House and Senate run by those unrepentant centrists Harry Pelosi and Nancy Reid. Why wouldn't they share power? Why wouldn't they hand over the power of the purse to a commission of, well, who exactly? No doubt there are BIG, BIG names on that list, all perfectly bipartisan and properly credentialed by the Ivy League, which has been unnecessarily excluded from formulating national policies and programs since the Carter years. Start Richard Ben-Veniste and Lee Hamilton. They look good on Commissions. Ben-Veniste has that Blago hair, which chicks dig, and Hamilton looks kinda like Ike.
Still, one should not be too pessimistic. It would be a tough sell for the American people, but if they'll vote for Obama, then anything is possible. But the Commission's work would need to be as open to the American people as the work of the Congress. How about turning it into a Broadway show? It could be the first big government stimulus project under Obama. A new Works Project Administration Federal Theater -- oops, sorry - Theatre Project. Every city could put on its own show. The real work of the Bipartisan Commission of Bipartisan Bipedals, all the hacking and slashing and "tough choice" making, would be instantly transcribed to the stage. David Mamet could write the scripts. Our children could be pressed into service as stage hands in exchange for college credit or tuition tax credits. Hollywood's prodigious propaganda machine could be volunteered into service, although they will expect certain tax breaks when filming comes around, otherwise they'll have to film in Toronto or Vancouver.
But perhaps there is a better way. Let these people who have been elected to office fight for their agenda, make laws on it, and impose it on the people who elected them. And if the People don't like it, they usually form their own ad hoc, informal committee every two or four years and make a fast track decision with an up or down vote on what they think of those elected people. We may all suffer in the meantime, which could be a longtime, but how the hell else are to we learn from our behavior.
The belief that committees of the unelected, who spare the elected from making tough choices or even stupid ones by allowing them to assign away their responsibility, can save us from ourselves is the worst sort of indictment of our Republic. It's the kind of crazy talk that makes messiahs of politicians. Such a Republic cannot stand for long. Nor should it.
