Feeding the Beast
| Wed Mar. 4, 2009 12:10 PM PST
Ross Douthat takes a guess at what Barack Obama is up to:
What you see in his budgeting proposals, I think, is the liberal equivalent of the conservative attempt to "starve the beast." In both the Reagan and Bush eras, Republicans passed tax cuts and ran up large deficits while hoping that by starving the federal government of revenue they would curb its long-run growth. Obama's spending proposals would effectively reverse that dynamic — they would create new spending commitments and run up large deficits, in the hopes that the dollars poured into health care and education will create a new baseline for government's obligations, which in turn will create the political space for tax increases on the middle class. Like the starve-the-beast approach, the Obama strategy puts off the hard part till tomorrow: Give them tax cuts today, conservatives said, and they'll swallow spending cuts tomorrow; give them universal health care, universal pre-K, subsidies for green industry and all the rest of it today, liberals seem to be thinking, and they'll be willing to pay for it tomorrow.
I think this is pretty much right, and it's exactly what conservatives are afraid of. As Bill Kristol knows all too well, social spending programs, once they get started, tend to be pretty popular. The odds of deep sixing, for example, national healthcare after it's up and running is essentially zero. And once it's up and running, taxes will follow because most Americans would rather see their taxes go up than their healthcare services go down.
Of course, this mostly applies to broad-based programs. Smaller ones are still hard to get rid of, but not impossible. It's the bigger ones that become third rails. Both Obama and the GOP are smart enough to know this, which is why Obama wants to swing for the fences and congressional Republicans want to become the Party of Nyet. If they don't stop him now, they never will.
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Comments
You'll pry UHC out of my cold dead hands
Submitted by Jasper on Wed Mar. 4, 2009 12:41 PM PST.
Agreed. And what's more, to the extent that the economy remains dysfunctional, any failure to cut the deficit as fast as the White House forecasts is justifiable on Keynesian grounds. Let's not forget that the Huge Stimulus Plan known as World War II (as Krugman likes to put it) lasted about six years.
Clinton handed Bush a
Submitted by eightnine2718281828mu5 (not verified) on Wed Mar. 4, 2009 12:46 PM PST.
Clinton handed Bush a balanced budget and Republicans spent it on the wealthy and a useless war.
I doubt that happens again; time to starve the Republican 'tax cut beast'.
Re: feed the beast
Submitted by mk (not verified) on Wed Mar. 4, 2009 12:52 PM PST.
Thanks for being straightforward about it, Kevin. But doesn't this require the same sort of odious budget shenanigans, wishful thinking, shady math, and general bull**** non-transparency that we just spent 8 years deriding in the Bush administration?
After all, Obama's not going to come right out and say "I'll raise your taxes in 5 years once we're all used to having health care." Just as Bush didn't say "oh yeah, BTW we'll have to gut Medicare in a decade. kthxbi"
Just as Bush didn't say "oh
Submitted by Jasper on Wed Mar. 4, 2009 1:10 PM PST.
Just as Bush didn't say "oh yeah, BTW we'll have to gut Medicare in a decade.
Bush and his ilk touted a theory that was both factually inaccurate and irresponsible, namely the idea that tax cuts pay for themselves. Obama is engaging in no such shenanigans. Indeed, his new long range budget forecast rather honestly admits that only half of the needed money for healthcare reform has been identified. Once you take into account the extra, needed $600 billion, I fail to see how he's engaging in Bushian dishonesty. Congressional Republicans are perfectly free to ask the White House where this money will come from, and I'm sure they will.
Budget Speculation
Submitted by Art Eclectic on Wed Mar. 4, 2009 1:34 PM PST.
Numbers I'd love to see:
Savings and revenue from legalizing and taxing marijuana.
Revenue from closing tax loopholes -- all of them.
Revenue from eliminating the home interest deduction.
Do that, then talk about raising my tax rate.
No equivalence
Submitted by Ross Best on Wed Mar. 4, 2009 1:46 PM PST.
Conservatives say selfishness today will lead to more selfishness tomorrow. Liberals say generosity today will lead to more generosity tomorrow. And who are you calling beast?
He's completely wrong in
Submitted by urban legend (not verified) on Wed Mar. 4, 2009 1:49 PM PST.
He's completely wrong in suggesting getting higher taxes is an objective of Obama (". . . . in the hopes that the dollars poured into health care and education will create a new baseline for government's obligations, which in turn will create the political space for tax increases on the middle class. . .. ) That's silly. The objectives are changes in public policy, and he like anyone else will keep taxes as low as he possibly can because higher taxes are never popular. The current tax changes are intended to undo Bush's regressive policies, as one piece of reversing the growth of wealth and income inequality that has been a causal factor in the decline of our economy.
It's funny how conservatives just don't give a damn about what people want. What kind of political movement is that?
Smaller Programs
Submitted by Joe S. (not verified) on Wed Mar. 4, 2009 2:26 PM PST.
Smaller programs are easy to get rid of when the beneficiary is an unpopular group without much lobbying strength--like poor people. Smaller programs are near-impossible to eliminate when the beneficiary is popular and has a good lobby--farmers. (Farmer welfare is relatively small in the scheme of things, although a damn sight larger than I wish.)
Wages offset taxes
Submitted by natural cynic on Wed Mar. 4, 2009 2:29 PM PST.
And once it's up and running, taxes will follow because most Americans would rather see their taxes go up than their healthcare services go down.
If health care reform even approaches the efficiencies of european and japanese health care, then wages should go up for most people that had health insurance in a benefit package and the profitability of companies that paid for part of the benefits should also rise. [if they survive] That should offset any increase in taxes.
Wages offset taxes for some...
Submitted by OwnedByTwoCats on Thu Mar. 5, 2009 8:00 AM PST.
If health care reform even approaches the efficiencies of modern, industrial economies, then up to half the people working in the health care field will have to find new work.
US health care consumes 15% of GDP. So it's not unreasonable to state that health care employs 15% of the workforce. The rest of the world gets by with 6% to 9%.
Most of the newly unemployed will not be service providers: doctors and nurses. The newly unemployed will be claims review people, the denied-claim consultants (often owned by the insurance companies), the plan designers, and those who review applications to see if you can be denied coverage or whether your claim is from a preexisting condition. Insurance plan marketing people.
Obama's spending proposals would... create new spending commitments and run up large deficits, in the hopes that the dollars poured into health care and education will create a new baseline for government's obligations, which in turn will create the political space for tax increases on the middle class.
This is not only colossally wrong -- it's completely disingenuous. Starving the beast was an end in itself for Reagan, and it remains an end in itself for conservatives today, whereas the inevitable tax increases resulting from Obama's spending are a means to achieve what he's betting Americans will come to see they're willing to pay for. Yes, he wants to delay the issue of raising taxes. But to buy into Douthat's argument automatically means you accept the premise that increasing taxes on middle-class earners is an end in itself for Obama, and it's just a happy coincidence that his policies require that. That's just a.m. radio moonbat conservatism. And you think "this is pretty much right"?
sorry, urban legend
Submitted by junebug on Wed Mar. 4, 2009 3:36 PM PST.
You said the same thing, just more succinctly. And you're exactly right.
hat tip junebug
Submitted by Adam (not verified) on Wed Mar. 4, 2009 4:23 PM PST.
Excellent point. Obama's goal is not to raise taxes on the middle class. The social programs are what he wants and the means to fund them come later.
Regarding the whole "middle class" thing -- it is unlikely that Obama has any reason to raise taxes on the middle class.
Rather any tax increases will start at the high end of the income scale and work downward as necessary. Right now we're looking at an increase for people over 250K. If there isn't enough revenue then the increase might be expanded to people over 200K. Then maybe 150K...
We're still not anything close to affecting the middle class, but the revenue increases are enormous...
If Obama's policies succeed ...
Submitted by susie (not verified) on Wed Mar. 4, 2009 9:28 PM PST.
The increasingly crazed tone of the right wing howling about Obama's plan supports the premise that they are terrified of the implications of it succeeding. Michael Gerson, normally someone who sugar coats his right wing babble in David Brooksian type gloss, practically p--ded himself today in the Washington Post about the tax increases. Stephen Colbert also just had an hysteriacal 'doomsday scenario' bit in which his final scenario was that the Obama program succeeded completely, and he actually got Club for Growth/WSJ nut case Stephen Moore to say that outcome would "force (me) to rethink everything I believe in." The panic these guys are displaying is the one thing that is giving me confidence that Obama's plans actually may work!
Health care and taxes
Submitted by gyrfalcon on Wed Mar. 4, 2009 10:34 PM PST.
I very much doubt that people who are relieved of the preposterous and rising burden of paying for health insurance are going to object to paying less for it through taxes instead.
I disagree with the quote
Submitted by JohnK (not verified) on Wed Mar. 4, 2009 10:56 PM PST.
I disagree with the quote and agree with several of the posts above. Obama is not intentionally driving up the budget. In my opinion, the goal is to accomplish something be that health care, weaning ourselves from fossil fuels or to improve the educational system. If that could be accomplished for free fine. If not then we pay what it costs (within reason). In other words, the goals are primary, the money is secondary.
Tax increase?
Submitted by Anonymous (not verified) on Thu Mar. 5, 2009 3:30 AM PST.
It is generally accepted in my industry, transportation, that health benefits "cost" the company some 25% of our salary.
To receive the same compensation package and assuming the health-care burden was moved to the "government", would the entire 25% go to government in the form of taxes or would only part of it, assuming UHC is more efficient than the hodge-podge in effect now?
OK, so perhaps it's not such
Submitted by jewelry stores (not verified) on Sat Aug. 15, 2009 2:05 AM PDT.
OK, so perhaps it's not such a good idea...but I want *someone* to give *somebody* more regulatory power, and SOON! Or use the regulatory power that is already there, but it's my understanding that the hundreds of regulators already in place have been prevented from exercising their authority, so take these folks off the leashes!
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