mithriltabby | There’s just no substitute for fiscal discipline (Reply)

Just finished reading The Politics of Bad Ideas: The Great Tax Cut Delusion and the Decline of Good Government in America, by Bryan D. Jones (a political scientist) and Walter Williams (an economist turned policy analyst). They scrutinize the nation’s fiscal policies since World War II and examine the effects of the recent fads for tax cuts. Some of the conclusions:

The “miracle” variant of supply-side economics— that tax cuts pay for themselves— is not supported by data.
The “starve the beast” principle of tax cuts— that cutting taxes without cutting spending and running up the deficit will prompt voters to shrink the size of government— doesn’t work. Deficit spending postpones worrying about the budget for enough of the electorate that there aren’t serious repercussions.
Raising taxes makes more people identify as fiscal conservatives. Lowering taxes encourages people to demand more from government.
There are no simple party-based solutions. Neither unified Democratic control of the White House and Congress, nor unified Republican control, nor “divided government” is a recipe for fiscal prudence.

They don’t have any snappy fixes for the problem. Their prescription is the policy equivalent of “eat your vegetables”: check your numbers against reality and don’t follow your theories in spite of contrary evidence. (For example, they suggest that the Office of Management and Budget should be separated into two parts, with a budget director appointed by the President, ratified by the Senate, who cannot be fired by the President, whose responsibility is to produce nonpartisan analysis.) They are highly displeased with George W Bush and the Republican-controlled Congress for allowing the Balanced Budget Act of 1997 to lapse in 2002 and ignoring analysis in favor of faith in supply-side theories, but draw a clear distinction between them and the fiscal conservative wing of the party, who they hold as the best hope for restoring fiscal sanity; they only assert that the Democrats couldn’t do any worse than the Republicans. Ultimately, the only solution is for everyone involved in government— politicians, think tanks, activists, and the voters— to regain “a healthy respect for sound finances and honest numbers”.