My prior post generated some followup when it was linked by Brad DeLong, including from David Boaz in the comments (and this post at a blog called Free Advice). This issue is important -- the Republican Party, broadly construed -- is going to have to get its fiscal policy straight if it wants to earn its way back into positions of power, rather than merely being there when the Democrats evenutally falter.
Reactions to the prior post suggest that the tea party participants were protesting not just high taxes but higher spending, particularly from the stimulus and bailout plans. I am still left wondering where the outrage was over all of the spending during the eight years of the Bush administration. The budget wasn't in balance even before the current downturn -- that's why the question, "Where were the Medicare Tea Parties?" is a good one. You get your credibility on this issue only by opposing higher spending even when the incumbents are giving you other things that you like, including conservative supreme court justices, lower taxes, looser regulations, and the like.<!--break-->
That doesn't mean that the current administration doesn't deserve to be criticized on its fiscal policy. Like his predecessor, President Obama has articulated a budget goal of "cutting the deficit in half in five years." In both cases, this standard is far too weak (even more so today since the starting point is so much higher). As I have blogged many times (recently here), the standard for fiscal responsibility ought to be a balanced budget over a complete business cycle with all entitlement programs in projected long-term actuarial balance.
We don't have anything close to that now. Politicians on the Left will tell you what programs they want to expand without telling you how they will raise enough taxes to pay for them. Politicians on the Right will tell you what taxes they'd like to cut without telling you how they will reduce spending enough to offset the revenue reductions (or without acknowledging that revenue will be reduced at all). Both approaches have led to chronic deficits over the past three decades. There appears to be no end in sight, unless, of course, some political faction puts forth a fiscally responsible budget plan and the rest of us act enough like grownups to reward them at the ballot box.