Statism’s fail­ure & re­turn to sound fis­cal pol­icy

The Washington Times Weekly - - Commentary - Tony Blank­ley

Some peo­ple can spot a slight in ev­ery com­pli­ment while oth­ers — the happy ones — find a com­pli­ment in ev­ery slight. So two weeks ago, as a free-mar­ket, low-tax, con­sti­tu­tional con­ser­va­tive, I hap­pily found an ap­par­ently un­in­tended com­pli­ment from the lib­eral New Repub­lic.

It is not of­ten that I agree with the cen­tral at­tack line of my some­times me­dia spar­ring part­ner, the New Re­publics’ Ed Kil­gore. But in his at­tempt at a hit piece on Michele Bach­mann and her stand for “con­sti­tu­tional con­ser­vatism” — what he thinks is an ef­fec­tive at­tack on us con­sti­tu­tional con­ser­va­tives — I take as a badge of honor.

Putting aside his re­flex­ive ac­cu­sa­tions against us con­ser­va­tives that we are se­cret seg­re­ga­tion­ists (mak­ing that hoary, false charge against con­ser­va­tives has be­come an in­her­ent part of the moral squalor of con­tem­po­rary lib­er­al­ism) his ba­sic charge is that those of us who con­sider our­selves con­sti­tu­tional con­ser­va­tives are re­ally con­sti­tu­tional restora­tionists. What we re­ally want, he charges, is the rad­i­cal pol­icy of re­turn­ing to the pre-1930s view of the Con­sti­tu­tion with its strict in­ter­pre­ta­tion of the fed­eral gov­ern­ment’s lim­ited pow- ers, the orig­in­ist view of in­di­vid­ual and prop­erty rights and the re­moval of Franklin D. Roo­sevelt’s New Deal leg­is­la­tion. He also charges us with want­ing to re­turn to pre-Key­ne­sian eco­nomic poli­cies. Well, yes. Guilty as charged m’Lord. Mind you, it’s not that I am against soundly fi­nanced so­cial in­surance mech­a­nisms, which the Ger­mans have more or less man­aged on an ac­tu­ar­i­ally sound ba­sis since the 1870s. It’s just that when one com­bines such sen­si­ble leg­is­la­tion with the meat-eat­ing in­stincts of Amer­i­can and Euro­pean statist politi­cians and their duped vot­ers, what evolves is what we have to­day — in both the United States and much of Europe: an un­af­ford­able, econ­omy-eat­ing, nation-de­stroy­ing, self-im­mo­la­tion de­vice.

Un­til a cou­ple of years ago, I never ac­tu­ally ex­pected to see a con­sti­tu­tional restora­tion. I as­sumed that Amer­ica was on a slow, ir­re­versible trek to the statist side. But the sheer in­com­pe­tence and, in some cases, men­dac­ity, of the cur­rent crop of statist politi­cians in both the leg­isla­tive and ex­ec­u­tive branches seem likely to bring on an eco­nomic cri­sis that will ac­tu­ally force Amer­i­cans to de­cide be­tween a con­sti­tu­tional restora­tion and a full em­brace of statism.

When the cur­rent, fail­ing ef­fort to fund our med­i­cal and re­tire­ment ben­e­fits pro­grams cre­ates an Amer­i­can bond cri­sis (Greece to­day, Spain, Por­tu­gal, Ire­land to­mor­row, Amer­ica prob­a­bly soon) that will lead to ac­tu­ally run­ning out of money to pay the promised ben­e­fits. When that avoid­able cri­sis hits, I’m pretty sure the Amer­i­can peo­ple will over­throw statism for re­stored con­sti­tu­tion­ally lim­ited gov­ern­ment. If we flop on the statist side, then the great Amer­i­can free­dom ex­per­i­ment will be over.

The Wash­ing­ton power hold­ers have drifted into fan­ta­sy­land. It is hard not to suspect that even the re­cent “big so­lu­tion,” a $4 tril­lion al­leged re­duc­tion-in-deficit plan (ru­mored to be $1.3 tril­lion in taxes and $2.7 tril­lion in spend­ing cuts) is in­ad­e­quate to the chal­lenge.

First, it is too small a re­duc­tion — we need to re­duce deficits by at least $10 tril­lion over 10 years. Sec­ond, Presi- dent Obama talks about at­tain­ing that $4 tril­lion in the 12th out-year. That is an­other way of say­ing that such pro­posed spend­ing cuts will mostly be back­loaded to the years 2023 and 2024 — three pres­i­den­tial ad­min­is­tra­tions and six Con­gresses from now. That would con­sti­tute the world’s long­est can-kick.

Mean­while, the pro­posed tax in­creases that are de­scribed be­guil­ingly by their ad­vo­cates as re­spon­si­ble, sen­si­ble and nec­es­sary are both ex­ces­sive and in­ad­e­quate — and mis­rep­re­sented. Not only is rais­ing tax rev­enues dur­ing an eco­nomic slow­down a vi­o­la­tion of even Key­ne­sian prin­ci­ples, which rec­om­mend both deficit spend­ing and tax cuts dur­ing eco­nomic con­trac­tions, but if the Ge­orge W. Bush tax cuts were re­pealed for all couples with in­comes of more than $250,000, it would yield just $700 bil­lion over 10 years, while the en­ti­tle­ment short­falls will be about $10 tril­lion. That would in­clude se­verely lim­it­ing mort­gage in­ter­est de­duc­tions and char­i­ta­ble de­duc­tions.

It is rep­re­sen­ta­tive of the dys­func­tions that arise when sym­bol­ism re­places pol­icy cal­cu­la­tion that the pres­i­dent has re­cently taken to call­ing for rais­ing the taxes on cor­po­rate jets — a pro­vi­sion of the tax code that the Demo­cratic Congress passed in 2009 and the pres­i­dent signed into law — rea­son­ably jus­ti­fied at the time as an ef­fort to pro­tect more than 11,000 work­ers on cor­po­rate-jet con­struc­tion who were los­ing their jobs. Now, with un­em­ploy­ment again go­ing up, that same pol­icy, which once sym­bol­ized help­ing work­ers, is char­ac­ter­ized as needed pun­ish­ment for the plu­to­crats.

If the fed­eral gov­ern­ment re­ally went af­ter all those bil­lion­aires the Democrats snarl about and con­fis­cated all the prop­erty of the coun­try’s 400 bil­lion­aires (down to their last set of cuff links and chil­dren’s base­ball mitts) it would yield only $1.3 tril­lion — about five months of fed­eral spend­ing.

This pan­tomime deficit-re­duc­tion process is ev­i­dence that those in charge have lost their men­tal grip on the true di­men­sions of the fis­cal cri­sis.

Once they have lost their men­tal grip, their eco­nomic grip — and then their po­lit­i­cal grip — also will soon slip away, fol­lowed, per­haps, by a restora­tion of lib­erty.

Tony Blank­ley is the au­thor of “Amer­i­can Grit: What It Will Take to Sur­vive and Win in the 21st Cen­tury”.

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