The evidence is in: The Republican Party has completely failed to reduce federal spending. It hasn't even controlled growth. It has done the opposite. It has sent spending through the roof. Further, its basic electoral strategy, the seemingly common-sense one of "starving government" by cutting taxes, though popular at the voting booth, has done nothing . . . this bares repeating . . . nothing to reduce the growth of government. The evidence suggests just the opposite. By reducing taxes, Republicans have given politicians (now most of them Republican politicians) more incentive to spend. It's an odd thesis. It goes against the grain of household economics. We like to say, "you can't spend what you don't have." Ronald Reagan put it best: "If you've got a kid that's extravagant, you can lecture him all you want to about his extravagance. Or you can cut his allowance and achieve the same end much quicker." Trouble is, as liberal columnist Jonathan Chait put it, "The child has a credit card." The conclusion seems obvious: The GOP has not only failed on its "less government" and "more freedom" agenda, it has put the conservative movement at an impasse. It has even made Democrats and liberals look wise. Quite a feat. Real Common Sense This is the thesis that Jonathan Rauch has recently pushed in The Atlantic and on cable TV. Rauch is a smart cookie. His 1995 book Demosclerosis put him at the front ranks of journalists covering the Bloated Government Beat. And parts of his thesis should seem awfully familiar to my readers. I've been harping on the failure of the GOP to control government spending for, well, it seems forever. Further, Rauch mines some of the same sage aphorisms that I have. He puts William Niskanen, the public choice economist who heads the Cato Institute, very near the front of his story. It's on Niskanen's authority that Rauch rests much of his case. Niskanen has explained, repeatedly, why, if you want to cut government, there's no substitute. You've just got to cut government. Cutting taxes means, as he puts it, making the perceived cost of government go down. So, like anyone faced with decreasing costs, citizens want more. Not the same. Certainly not less. So we get more. More government. All because cutting taxes was put ahead of what's most important: controlling spending. Surreal Sense Of course, liberal readers of Rauch are probably like Mr. Chait, just champing at the bit to raise more taxes. And because Republicans have further bloated the debt, increasing the portion of the budget devoted merely to servicing interest, anti-tax forces will have a hard time keeping up their resolve. The ultimate result of Republican policy may be to increase taxes . . . without decreasing government. After all, decreasing government is hard work. And it goes against the grain of so much politics. Politicians like to spend. Indeed, this is so much the case that the first step to cutting back on spending is the "mere" controlling of growth. Tax cuts, much as I like 'em, don't seem to slow government spending. Despite Republicans' seemingly valiant efforts, when Republicans took control of both houses of the legislature and the executive in 2000, nearly every brake on spending appeared to have been removed. Niskanen's analysis notwithstanding, tax increases are not the answer. His simple supply-and-demand analysis is, though neat and tidy, not quite on the mark. Americans don't want more government because they're received a new tax cut. That looks at the economics of politics the wrong way. Say Americans want to decrease government (as many, perhaps most, do), and their leaders assure them that cutting taxes is enough. They don't like taxes, after all, and taxes seem like a chief indicator of big government, so they let the issue slide. It's really about the economy of attention. Americans don't have huge political attention spans. When politicians talk only about cutting taxes, they tend to satisfy "enough" of Americans' desires for less government. In effect, Republicans have pulled a bait-and-switch. Want less government? Then vote for us, we'll give you less taxes! The logic doesn't quite follow, but it passes in politics because, well, politics isn't exactly conducive to clarity of thought. Continued... |