Tax Analysts Blog

Bubble Over Washington

Posted on Nov 10, 2010

This may sound snobby and elitist—but there’s no avoiding it: Americans need a good lesson in basic economics. How can we say such a terrible thing? Here’s how: every poll and every politician in every congressional district says the nation’s number one problem is lack of jobs. But they will not even consider using the number one method of solving unemployment in recession: a jolt of tax cuts and hikes in government spending, a.k.a. “stimulus.”

Now let’s really take the gloves off. Let’s really insult the collective intelligence: Americans need a good lesson in arithmetic. Every poll and pol say we gotta get those government deficits under control. Well, we cannot cut taxes—leave social security, Medicare, and defense uncut—and balance the budget all at the same time. It simply does not add up.

Our entire fiscal debate is premised on job creation without stimulus and fiscal rectitude without political pain. Hope is prevailing over reason. Maybe next we can raise test scores with less study and more video games, shed pounds without diet or exercise, reduce fatal crashes by raising the speed limit.

A bubble has descended over Washington. Reasoned ideas may not penetrate. But if you have any catchy ideas for helping win the next election, welcome. In the bubble lobbyists, pollsters, fundraisers, and political consultants thrive. Sound bites are preferred to specific policies. Ideology reigns. Actual budgets are scarce. Leadership is absent. Just as on Wall Street before the crash, rosy scenarios and optimism are the stepping stones for success—in the short term.

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