(Saving) Money Is No Object: Tea Party Budget Thinking

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(Saving) Money Is No Object: Tea Party Budget Thinking

Published in the Maryland Daily Record February 7, 2011

            Arguably the most important law of them all is the federal budget.  Its passage and contents are the precondition of the execution, enforcement and administration of all other federal laws and many state ones.  Its provisions embody some of the most important political choices we as a nation make.  So what politicians want to do with the budget really matters.

            However, it is not always easy to tell what they want.  Shortly after Barack Obama’s State of the Union Address and the Republican response voiced by Congressman Paul Ryan on January 25, presidential advisor David Axelrod acknowledged on television that neither side had yet “turned over their cards” on the specifics of how to address our budget problems, though that was clearly coming soon.

          A formal leadership position communiqué – sort of

            The third voice in our budgetary debates, that of the Tea Party, has, however been heard.  In a major above-the-fold op-ed piece in the Wall Street Journal on January 19, Dick Armey, former House majority leader, and Matt Kibbe, co-authors of Give Us Liberty: A Tea Party Manifesto, provided a very clear picture of how their movement would handle the budget.  This is the closest thing to a formal leadership position communiqué we are apt to receive from a movement that fancies itself as leaderless.

            One logical solution to our budgetary shortfalls, i.e. raising taxes, is not even mentioned.  We seem to have reached a point in our nation’s dialogue where the idea of diminishing private wealth in order to maintain or better public goods does not even rate consideration.  To be sure, the argument exists that increased taxes actually lower Treasury’s bank balance.  Armey and Kibbe cite the godfather of this kind of thinking, Milton Friedman.  But the self-contradictory theory that giving the government less money somehow gives it more remains but feebly supported by experience.  In real life it was called Reaganomics, and the evidence seems to have been that tax revenue increases accompanied the tax cuts during Reagan’s years, but also that directly increasing taxes would have grown revenue far more robustly and not left us with as huge a deficit as Reagan saddled us with.[1]

          Serious dismemberment

            Yet increased taxes are off the table in Tea Party-think.  That leaves only one route to budgetary balance, and that is cutting federal programs.  Well, “programs” is hardly the word for it.  These people are into serious dismemberment.  They would simply eliminate the Departments of Commerce and Housing and Urban Development, and the Small Business Administration, for instance.  They would de-fund NASA by 50%.  They would sell off the government stake in Amtrak.  They would end farm subsidies. 

            Now Commerce of course runs the Census, the Patent and Trademark Office, the National Institute for Standards and Technology, the Oceanographic and Atmospheric Administration, for starters.[2]  And HUD is at the forefront of programs designed to assure housing to those without market power to acquire it on the open market, like Section 8 and block grants to assist moderate income housing.[3]  There’s no suggestion in Armey and Kibbe’s piece that these programs would be relocated.  And obviously if they were, then the promised savings wouldn’t materialize.  So we have to assume they aim at the life of these programs, not only that of the departments that implement them.  (No Census, though?  Uh, doesn’t the Constitution require one?)[4]

            The Republican Study Group, a set of Congressman largely affiliated with the Tea Party, produced a report on January 20 that called for elimination of the Corporation for Public Broadcasting, the National Endowment for the Arts, and the U.S. Agency for International Development (the foreign aid administrators).  And most other discretionary spending would be cut by 15%.  Meaning, Democrats pointed out, that DOJ would have to fire 4,000 FBI agents and the DEA would need to ax 1500 DEA agents, and Agriculture would need to cut 3,000 food safety inspectors.

            And I haven’t even touched on what the Tea Partiers want to do with entitlements.  There isn’t space.  This discussion only covers “discretionary” spending.

          The real dynamic

            Does this seem like governing, in the sense of running the existing government?  Obviously not.  The dynamic here is that the Tea Partiers have seized upon the penury of our government as an excuse to try to change in very fundamental ways what government does.

            One common theme is that the Tea Partiers want the government out of the business of helping economically-disadvantaged citizens.  Hence the end of HUD, SBA and Americorps.  Another is that the Tea Partiers want the government to stop directing the economy.  The anticipated demise of Commerce and of farm subsidies is clear evidence of that, as well as the sought privatization of Fannie Mae and Freddie Mac.  A third theme is the drastic diminution of government spending on infrastructure, like the “privatization” of Amtrak (as if our freight railroads, which necessitated Amtrak’s formation by starving passenger service over two generations, would buy it) or the end of urban mass transit grants, also called for by Armey and Kibbe.  A fourth theme is attacking underwriting of the intellectual stimulation of the elite: CBP and NEA.

            Of this thinking, we cannot exactly ask cui bono in the classic sense,[5] as translated by Sherlock Holmes: “Who is it profits by it?”[6]  The truth is, if all these government services were discontinued, each of the Tea Partiers would be personally hurt in ways they have not stopped to imagine.  Yet, profit or no, their spokespeople claim to desire it and plan to work for it.

            One has to ask what kind of country the Tea Partiers desire, though.  Clearly it is a big step away from a commonwealth.  In Tea Party Utopia, it seems, the Partiers would get maximize their personal wealth, at whatever cost to the well-being of their fellow-citizens, even, or perhaps especially the poorest.  It’s a country where there would be no planning or direction of economic activity from Washington, apparently in the faith that an atomized economy could avoid obliteration by the better-organized economies of other nations.  And a faith as well, in the teeth of historical evidence, that privately-funded economic forces undirected by government, would give us an adequate infrastructure.  And in Tea Party Utopia, cultural elites would be denied the support and recognition that even the tiny sliver of the national budget dedicated to edifying them conveys.

          A more perfect disunion

            This would not be the “more perfect Union” the Framers envisioned in the first phrase of our Constitution.  This would be a more perfect disunion, in which most of us would at the mercy of the mercantile aspirations of those with money, with whatever amelioration might be imparted by Adam Smith’s Invisible Hand.  Somehow that Invisible Hand would magically provide for the environment and for future generations.  And consumers would be safe without safeguards (who needs those 3,000 food safety inspectors anyhow?) and informed without information (free at last, after NOAA’s demise, to make up their own weather reports!).

            You may ask what kind of people would want to remodel our country this way.  I’m not in the business of casting aspersions, so I won’t call anybody any names.  But personally I would be ashamed to attend their Tea Party.

[1]   I do not purport to be an expert in this area.  I am impressed, however, with the Wikipedia article on Reaganomics, last viewed by me February 6, 2011, which includes a large section analyzing in detail the revenue impact of the various tax laws passed during Reagan’s time, and which I think supports my generalizations above.  There is also a counter-argument to be made that at the end of the Reagan era, the tax cuts legislated at the beginning had all been effectively offset by other tax increases.  See this Forbes piece by Bruce Bartlett.  The issues here also get all tangled up with economic growth, which indirectly affects tax revenues.  However, my point here is focused on one pair of variables only: tax cuts and tax revenues.  And on those, I submit, the evidence is clear enough: the Economic Recovery Tax Act of 1981, Reagan’s big tax cut that changed the upper brackets forever, diminished tax revenues, and did not raise them.  And to the extent Milton Friedman or his latter-day apostles say otherwise, they are wrong.

[2]   To start learning about what Commerce does, start with the official website, and drill down.

[3]   Start here.

[4]   “The actual Enumeration shall be made within three Years after the first Meeting of the Congress of the United States, and within every subsequent Term of ten Years, in such Manner as they shall by Law direct.”  Art. I, §2.

[5]   A favorite expression of Cicero’s.

[6]   Found in The Naval Treaty (1893).

Copyright (c) Jack L. B. Gohn

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