Names Change, But the Game Remains the Same

Tue, 03 Feb 2009 01:03:46 +0000

Two quick observations as the "stimulus" bill works its way through the bowels of the legislature:

I think that I am going to be as annoyed over the next 4-8 years by policy makers who advocate spending increases without matching tax increases as I have been the last 8 years by policy makers who advocate tax cuts without matching spending cuts.

I think that I am going to be as annoyed over the next 4-8 years by policy makers who exaggerate the demand-side multiplier effects of government spending or tax cuts as I have been the last 8 years by policy makers who exaggerate the supply-side revenue effects of reductions in marginal tax rates.

Thomas Jefferson understood this game nearly two centuries ago (ME refers to the source of the quote):

"We believe--or we act as if we believed--that although an individual father cannot alienate the labor of his son, the aggregate body of fathers may alienate the labor of all their sons, of their posterity, in the aggregate, and oblige them to pay for all the enterprises, just or unjust, profitable or ruinous, into which our vices, our passions or our personal interests may lead us. But I trust that this proposition needs only to be looked at by an American to be seen in its true point of view, and that we shall all consider ourselves unauthorized to saddle posterity with our debts, and morally bound to pay them ourselves; and consequently within what may be deemed the period of a generation, or the life of the majority." --Thomas Jefferson to John Wayles Eppes, 1813. ME 13:357

Every policy in this "stimulus" bill that does not go for long-term capital projects where the benefits are large relative to the costs should be purged. If they are kept, then the bill itself should also legislate the tax increases in the near future that will pay for them. More from Jefferson:

"It is a wise rule and should be fundamental in a government disposed to cherish its credit and at the same time to restrain the use of it within the limits of its faculties, "never to borrow a dollar without laying a tax in the same instant for paying the interest annually and the principal within a given term; and to consider that tax as pledged to the creditors on the public faith." On such a pledge as this, sacredly observed, a government may always command, on a reasonable interest, all the lendable money of their citizens, while the necessity of an equivalent tax is a salutary warning to them and their constituents against oppressions, bankruptcy, and its inevitable consequence, revolution." --Thomas Jefferson to John Wayles Eppes, 1813. ME 13:269

You want bipartisanship? How about both parties start taking their cues from the original Democratic-Republican?