The Fiscal Commission -- Failure on Multiple Levels

Tue, 16 Nov 2010 16:37:12 +0000

Stan does a fine job of analyzing how the Bowles-Simpson plan may actually set back efforts to trim long-term deficits.  Brad DeLong is correct when he describes this commission as an "unforced error" by the Obama administration.  At the level of presidential policy and the specific direction of the commission, these are failures primarily in the choice of strategy and tactics rather than failures in defining the objectives.

In a very interesting post last Thursday at Economix, "On the Deficit Commission, a Failure of Will and Not Ideas," Catherinie Rampell wrote:

So why are we still in the same mess?

Because the country’s budget woes are not a failure of wonkish ingenuity, but a failure of political willpower.

The fact that the government is, and has been, spending more than it brings in through taxes is well known, and thanks to a huge, intricately detailed report published regularly by the Congressional Budget Office, we also know just about every possible combination of spending cuts and/or tax increases that will add up to a more balanced budget.

The problem is that just about every potential solution to the long-term fiscal crisis involves severe short-term political pain, in the form of fewer services or higher taxes. And the people in charge of selling these ideas — members of Congress — know that their careers are aligned on the short-term time-frame, not the long-term one.

So the question becomes: How do you get politicians elected on a short-term basis to think about the long-term good of the country, given that short-term and the long-term goals appear to be at odds?

I came to a similar conclusion after spending time in DC at the CEA.  I was recently quoted as follows:

“There seems to be such perennial and widespread dissatisfaction with what happens in Washington, but this is not so much because of a lack of knowledge or understanding but a lack of leadership,” he said.

After his stint in Washington, Samwick found a new way to directly address the issue of leadership by becoming director of the Rockefeller Center.

“I thought the center was an interesting place where you can continue to have an impact on how well people understand the issues that are the basis of a lot of government policy,” he said. “You can also do quite a lot to make Dartmouth students more capable leaders, as they inevitably find themselves in positions where displaying leadership would matter quite a lot.”

Rampell calls it "political willpower."  I called it leadership.  Neither is quite right.  To propose the fiscal changes on the scale required to make progress against the long-term deficit is to become not a political leader but a political martyr -- someone whose political life is ended for the sake of drawing attention to the problem and taking a stand on its solution.  What makes a leader into a martyr is the fatal response of the followers. 

And we -- voters -- are the followers.  As a distinguished visitor to campus recently put it, "[W]hat we’re better at as followers is pulling down.  Followers haven’t figured out how to use some of this power and influence and translate it into something constructive.”  We are the ones who have made it such that politicians' "careers are aligned on the short-term time-frame, not the long-term one."  Ezra Klein has been all over this -- the voting public doesn't prioritize the deficit.  And as long as that's true, why would we expect any effort, whether in the commission or the legislature, to have much success?