“There you go again.” Those now-famous words pretty much sealed the deal in the Ronald Reagan-Jimmy Carter debate in 1980 and proved what we have seen over and over: In politics, charm and wit usually count more than facts and logic. After Reagan’s victory, we set out on a path of deregulation and tax cuts, a 30-year run on borrowed money and borrowed time that ended horribly in 2008. We know now where we stand in terms of what matters: a jobs crisis, declining middle-class incomes, structural federal budget deficits, trade deficits, and on and on.
And what do Republicans offer now? The Pledge to America, the guiding document of the surging Tea Party, and the resurgent Republican Party, is about as vapid a document as one can imagine. It is nothing more than an offer of candy to kids on Halloween, with no concerns about what happens after the sugar high wears off. Its numbers simply do not add up, and its deregulatory language is remarkable in the context of the past several years we have lived through.
I asked one of the perceived sensible leaders of the conservative movement where the spending cuts would come from to balance the massive tax cuts offered to all citizens. He proposed two areas: the National Endowment for the Arts and public radio. It was a good laugh line, at least. These two suggested cuts—traditional conservative targets—total about $250 million, less than 1/100 of 1 percent—less than 1/10,000th—of a federal budget that totals about $3.5 trillion. Not what a true executive would consider major areas of budget concern. Realizing that this answer didn’t really measure up, he then tried to suggest that privatizing Social Security—letting people out of the government system—would be the answer. No sane person thinks that would have worked out well for our seniors over the past couple of years.
Sometimes simple facts are worth repeating: During the Clinton years, marginal tax rates were raised to restore fiscal sanity, leading to federal budget surpluses, and 23 million jobs were created. During the George W. Bush presidency, marginal rates were cut, the budget was left with a severe structural deficit, only about 1 million jobs were created, and we descended into an economic cataclysm.
There is no simple causal relationship to any of this, of course, especially since global macro trends have a greater impact on the American economy every year. But the simple mantra of the Tea Party and the Republican Party—low taxes and government deregulation will lead to economic vitality—is demonstrably counterfactual.
Many of us had presumed that after the events of the last two years the appeal of pseudo-libertarianism would have worn off. The image of Wall Street being bailed out should have restored some sense to the debate, challenging everybody to refocus on a more rational conversation about when, how, and why government intervention in the market could work.
Surely the role of a “smart” government—investing in the infrastructure and social capital necessary for long-term competitive success while setting reasoned rules to insure competition and fair play, and limit risk of over-leveraged excess in the market—would make sense to people. Could we not agree that the current demand-side crisis—with an effective unemployment rate hovering in the low teens and corporations sitting on close to $2 trillion of cash—requires another stimulus of some significant magnitude to put the 20 million unemployed back to work? And could we not also recognize that as soon as the economy stabilized, we would have to take dramatic action to restore sanity to entitlement programs that are simply unaffordable over a 25-year time horizon? Can we not oppose bonus bailouts and bridges to nowhere without opposing building the modern equivalent of the Erie Canal or the interstate highway system—the critical tunnel between New Jersey and New York, for instance?
Unfortunately, it appears not. I really don’t care whether Christine O’Donnell is a witch. I do care about her plan to make us competitive in a global economy. I really don’t care that she didn’t go to Yale, but I do wonder how she thinks we can prevent another financial sector meltdown if we don’t change banking rules.
We had better face up to a stark and uncomfortable reality: The clock is running out on our status as the world’s dominant political and economic power. Platitudes, make believe, and hoping it will be so are not going to carry us any further.
We have three weeks to make this choice. Because if we end up with a Congress and a White House that fail to re-chart our course over the next two years, it is clear who the winner will be. It will not be the person sworn in as president in 2013. It will be China, Brazil, and India. They are loving every minute of this.