Too Phony for the TPFN Crowd?
In my previous post I said that Tim Pawlenty's proposal for a balanced budget amendment while supporting more tax cuts and refusing to propose any cuts in spending was too phony even for the right wing tea party/Fox News (TPFN) crowd.
The consensus of opinion based on comments to this post as well as those of other bloggers has convinced me that I am wrong. (See here, here, here, and here.) There's no one too phony for this crowd to glom on to. (See Palin, Sarah, and Beck, Glenn.)
I hereby concede error. I allowed wishful thinking to get the better of me.
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Bruce, I think you're right
Bruce,
I think you're right that "there's nothing too phony for this crowd", but please don't offer as support for your assertion the views expressed by a bunch of clear ideological hyperpartisans -- Krugman, Mother Jones, Washington Monthly (I'm not familiar with Bernstein) -- and PLEEEEASE don't offer such views as representative of "the consensus of opinion" (even in conjunction with a couple of commenters here of unknown biases/agendas). It's virtually impossible to present something negative about Republicans/conservatives to such folks with which they wouldn't readily and enthusiastically concur. Ditto for their separated-at-birth counterparts on the right regarding any negative statement about Democrats/liberals. Whether due to an utter lack of objectivity and/or lack of sincerity, the views of such folks on such matters usually represent little more than a reflexive reaction (soon echoed by dittoheads on ideological echo chamber blogs, talk radio, and elsewhere).
Setting aside the dictionary
Setting aside the dictionary definition of "consensus" and adopting the sad notion that "consensus" means the broad smeer of opinion, I would like to cancel Brooks' vote. Krugman may not have anything nice to say about Republicans, he is usually not wrong in substance. The things he says are wrong are actually wrong. One cannot say the same for Beck.
Half right perhaps
I've never attended a Tea Party (they have a knack for scheduling them on workdays) but have engaged with several Tea Party activists on RPVNetwork as well as talked with them at Prince William County Republican meetings. Contrary to the image of them gained from MSNBC, they are a very diverse group. Yes, some of them are off the wall crazy; but far fewer than in other groups I've delt with (Code Pink, Kos, MoveOn, Acorn). Most of them are willing to listen to more well informed policy experts who talk with them rather than down to them. However they do recognize that government spending has gotten completly out of control. They also understand that when you are in a hole, your first step is to stop digging. I beleive many of them would be receptive to the ideas Congressman Ryan is putting forward, which even Ezra Klien recognizes as a serious proposal. Also, I think many of them would at least listen to revenue raising proposals; but only if the tax increase advocates had demonstrated their own credibility with serious spending reduction proposals, something I have yet to hear from the enlightened DC intelligensia.
As for Fox News, I watch two of their shows regularly (Special report with Brett Biear and Fox News Sunday with Chris Wallace) and have found both reasonably informative and useful. I certainly agree that Beck and Hannity are not worth the air time but neither are Olbermann and Maddow.
Being phony isn't the real problem
The problem is that tax cuts = increased revenue, counterintuitive as it is, has become firmly lodged in the minds of a lot of people. I've talked to some people about this, and for a lot of them this is just an obvious truth: cutting taxes always increases tax revenue, and raising taxes always decreases tax revenue. That cutting taxes might, under any circumstances whatsoever, result in *decreased* tax revenue, or that raising taxes might, under any circumstances whatsoever, *increase* tax revenue, is just inconceivable.
Under that assumption, Pawlenty's not being silly at all. The tax cuts he proposes will take care of the problem.
I'm not exaggerating this. This is the mindset. To get anywhere at all on increasing budget responsibility, you're first going to have to get people to believe that tax cuts are not magic revenue-generating machines.
Reply
Even I don't believe Pawlenty is that stupid. But if you find direct evidence that he is talking about a Laffer Curve effect please call it to my attention so I can write another post about what an idiot he is.
It's not him, it's his audience
I've never followed Pawlenty closely, so I don't know of any such evidence off the top of my head. Nevertheless, I do think that's what he's referencing. Whether that's something he actually believes, or just being disingenuous, I have no idea.
My only point was that many of the people reading his article, and most likely the ones he's intending it for, do believe this. I don't think it can be emphasized enough how deeply the "tax cuts = increased revenue" idea has become ingrained into the minds of a part of the public.To those people, he's not going to come across as fake or phony, even if he really is.
He might indeed be using that just to score political points or whatever. But I would bet that, whether he believes it himself or not, he knows that (at least some part of) his intended audience does.
Passerby, I suggest you
Passerby,
I suggest you direct those folks to my compilation of (mostly) conservative economists, including W. Bush's own top economists, all debunking that myth http://swordscrossed.org/node/1671
And just for fun, ask them on another occasion if they believe in Reagan's (and Milton Friedman's if they know Friedman) "starve the beast" assumption: that cutting tax rates will lead to lower government spending by "starving the beast". My experience has been that most will say "Yes". You can then point out to them that the "starve the beast" assumption is mutually exclusive with the "tax cuts increase revenues" assumption, since the same tax cuts cannot both increase and decrease total revenues (over a given period). It's fun to watch/listen to their reaction when this is pointed out.
You can also explain to them why the oft-mentioned supposed basis for their assumption -- that revenues have increased "following" the Kennedy, Bush and Reagan tax cuts -- doesn't really prove cause and effect, or even correlation! The thing is, revenues tend to grow over time (over a few years or longer) regardless of whether tax rates are increased, decreased, or unchanged, because the economy is more often growing than in recession. What those folks are doing with their cherry-picked observations violates the most basic idea in correlation analysis: not just observing what happens to Y when X is lower but how changes in Y vary when X is lower vs. when X is higher or unchanged. What they are doing is like if I said (1) that every time I've lived in Connecticut for several years, I've looked older at the end than at the beginning of that period, and (2) therefore, Connecticut makes me look older. If I've also looked older after several years whenever I have NOT been living in Connecticut, it's nonsensical for me to conclude that Connecticut causes me to look older.
Waaaaay late with this .....
.... and if it's not even read, that's understandable. But I still just wanted to say:
First of all, I will certainly use your arguments in the future. Thank you. And also for the link.
About that link, though. See how often it comes up? And the reason it keeps coming up is that Republican politicians keep on claiming that cutting taxes increases tax revenue. So it shouldn't really be any surprise that Pawlenty might do the same thing.
If we're ever going to get anything done with the budget deficit, then people who know better need to kill this idea dead. It's very seductive, and if you ever look over the comments of any political blogs, you'll see it all over the place.
Phony isn't relevant here
I've tried really hard to understand the message of the Tea Partiers, and finally concluded there is no message. It's just a bunch of people who are angry about the way they perceive the world.
Some TPers are angry that Medicare exists, others are angry that at some point in the distant future government plans to cut benefits in some small unknown way. Some TPers are angry about government getting involved in markets, others are angry that government isn't stepping in to "fix" their underwater mortgage. Often the same TPer holds both mutually exclusive views.
Your mistake, Bruce, is attempting to find some sort of logic to the TP movement, and there is none. It's an emotional outpouring and it's open to anybody who shares their misery and anger with "the government." It doesn't matter if what they're angry with is nothing the government did, it doesn't matter if what they're angry with is the government doing (or proposing) exactly what they say they want the government to do. It doesn't matter if Tim Pawlenty's ideas are utterly illogical and incoherent. All that matters is that he's very upset that society isn't working *exactly* the way he wants it to, and he blames "government" for that. That's the only thing that unites TPers, anger with government.
That's why this movement should be so scary to rational, thinking people. It is an entirely destructive movement. They propose no coherent alternative to the way things are now, they simply want to end the system as it exists now. End taxes, destroy government, and hope that all the problems of human beings living together in large groups suddenly resolve themselves. That's the future if the TPers get their way.
Any rational person could simply look at Somalia or tribal regions of Pakistan and conclude this is a terrible idea. But while the TPers may be perfectly rational people in many areas of life, the logical part of their brain has simply turned off with respect to government. Despite the fact America is near the top of nations by just about any standard of living, they seem ready to destroy it all over the (relatively few, by global standards) problems that exist.
Tea Partiers Uniting Credo?
Devin, it really, really sounds like the people you are describing were illustrated pretty well in the movie "Idiocracy". Maybe it's time to bring back some equivalent of Roman games and gladiators to keep them appeased.
Balanced Budgets
It's a shame, because there are plenty of us non-phony, reasonable advocates of a sane and responsible budget policy, and it unfortunately smears the whole effort as being the specious and cynical maneuvers of partisans of a particular ideology. It's difficult to generate broad support when the perception is that it's a party politics issue, and when people reflexively adopt a loyalty to their side and hatred over the other, instead of conducting independent analysis.
On the other hand, it's easy to criticize unthoughtful proposals but much harder to explain one's own position. Please Mr. Bartlett, could you post your rough baseline of what responsible budgeting looks like to this blog? What is your idea of what a reasonable, post-recovery (say, 2015 thru 2030) budget, debt and tax regime would look like?
My impression is that it is almost unavoidable that people are going to have to get used to paying more for less when it comes to government services. Promising otherwise is a departure into dishonest fantasy.
Budget
I don't have time to put together an alternative budget. But I am on record as favoring these actions: a significant increase in the tax/GDP ratio above the long-term trend by implementing a VAT; changing the indexing formula for initial SS benefits from wage to price indexing; raising the age for qualifying for both SS and Medicare to 70 and indexing it to longevity; ending the wars in Iraq and Afghanistan as soon as possible. There are no doubt lots of other things that I would support such as ending ag subsidies and so on. I don't know what their near term impact would be because I don't know how quickly they could be adopted and things like raising the retirement age would have to be phased in over decades.
There is a plan for spending
There is a plan for spending cuts, but it's so radical that it cannot be baldly stated. If a politician suggests that, in order to bring the budget into line, consideration should be given to some moderate level of means testing for social security or medicare (some means testing was already achieved through the Medicare Part D legislation), then there is some likelihood he is working toward the goal. Prosaic talk about tax cuts and Laffer is a beard for the real agenda.
Means Testing
I don't favor means testing for either SS or Medicare. However, I would sharply raise Medicare Part B premiums back to 50% of program costs, as they were initially.
All entitlement programs are means tested on a net basis
The net value of an entitlement is the nominal benefit minus whatever the recipient pays in taxes that support the program. Given the fungability of federal revenues, any increase in taxes, including those derived from a VAT, tend to decrease the net value of entitlement programs. Means testing on the other hand reduces the net value by reducing the benefit while taxes remain stable. Consequently, tax increases and benefit reductions through means testing have the same net result and both are based on the ability to pay/sacrifice but, to me at least, means testing is more transparent.
As someone who will be eligible for a wide variety of federal benefits when I retire (military and civilian retirement, Tri-Care, SS & Medicare), I would reluctantly advise means testing even if it costs me some money. Some revenue increases will be necessary but I remain concerned about their impact on growth. Also means tests can be adjudicated annually to reflect inidividual need while broad based taxes, particularly consumption taxes such as a VAT, would be much more difficult to adjust to reflect diverse levles of income.