Monday, April 27, 2009

A Dream Deferred

Carl over at The Reaction has put up a very thought-provoking piece about the steps the Obama administration and Congressional leaders are taking to advance a progressive agenda. He's concerned - and with reason.
It's a radical departure from congressional precedent, in which budget rules have been designed and used to reduce deficits, not expand the size of government. And it promises bitter divisiveness under an administration that has made repeated promises to reach across the partisan divide.
For my part, I see the move as something rather different, and dangerous in its own way.

One of my longest-held political principles is that a budget process that can be balanced over time is critical tot the stability of any government. Keynes spoke to this eloquently: when the economy is weak, the government must spend to stimulate production, but when the economy is strong, the government must recoup those expenditures as preparation for the next downturn. Economists following Keynes, and economic policymakers, have made ample use of the first half of the principle. They have, however, conveniently forgotten the second.

Congress has presented multiple pieces of legislation to require the federal budget be balanced as a matter of practice. The amendments offered, however, were to require a balanced budget every year. This, if Keynes is correct, is not only impossible but massively unwise as it prevents the federal government from taking action to stimulate a faltering economy even as it likewise prevents the same government from recouping those losses and posting a net gain during times of prosperity. Balanced budgets under these conditions would enshrine a certain amount of debt: any obligation outstanding would necessarily be retained as a sort of credit line that once paid off could never be incurred again, preventing its closure just as the interest paid on it would become - as has become the de facto case - merely the cost of governance.

The GOP showed its hand in the 90s, demanding a balanced budget. It was no doubt to their chagrin that the Clinton administration, buoyed by a thriving tech sector, was able to oblige. However, the taxation required to maintain the progression was successfully presented as an excessive burden. Whether this was an ideological position, or merely maneuvering to sabotage the economic success of the Clinton years, is not clear. What is clear is that the Bush administration lost no time revising the tax code, sabotaging the balanced budget effort even as they made the burden less on the higher economic echelons of society.

I will freely admit that I have never had a particularly high opinion of the Bush presidency. There are many reasons for this, the brutality of the GWoT and radical rewriting of public ethics being chief in my complaints. However, the effective nuking of the federal budget is not far behind. Bush's policies did little to diminish the size of government except in areas of particular interest to the most radical of the administration's supporters. Reduced taxes placed an excessive burden on the existing infrastructure. And the various efforts of the GWoT squandered what little was left, leaving the US massively in debt and all hope of a short path to a balanced budget and reduced federal obligation in the dust.

This is the fiscal mess that Obama has inherited along with the economic collapse. Abandoning the irresponsible tax cuts of the Bush administration would in ordinary times be a responsible measure aimed at balancing the budget. Under the present circumstances, however, a balanced budget is as realistic as flying to the moon on a contraption built of string and sealing wax. The shattered economy combined with the enormous costs of occupation of two foreign lands make any attempt to balance the federal budget in the near future suicidal at best.

In turn, the radically increasing costs of healthcare in the US present the most likely source of bankruptcy, both private and public. Healthcare costs are increasing at multiples of inflation just as the average salary is shrinking and as employment is falling faster than the GOP's polling numbers. Social Security may not be an issue for many years yet, but Medicare is fast approaching a critical point where, between the needs of an aging population and the skyrocketing costs of preserving that population's health, it will be unable to meet the need.

Indeed, the pressures of keeping healthy under the US system are becoming so bad that medical tourism is fast becoming the avenue of choice for anyone facing major medical procedures. Walking with Ghosts has a fascinating projection on how many US citizens are projected to seek medical care overseas, not merely for the sake of the novelty of travel involved but also to save considerable expense. Should this trend progress much further, as the costs of healthcare abroad present an increasingly small fraction of the costs of the same care in the US, the healthcare system will either fail utterly - a tragedy for any nation - or outsource such procedures as a matter of course - which would deprive the US of major healthcare talent and needed tax revenue, producing a like result.

Under these circumstances, substantial review of US healthcare policy is not just a necessity but a mandate.

The recent step taken by the Congress - to include a new healthcare bill in the current budget legislation as part of the reconciliation process - is therefore most necessary, particularly if the long-term health of the US economy and the federal budget are to be maintained along with the long-term health of the US citizenry.

Carl's suggestion, that this is a less-than-usual method of handling such legislation, and that this is a substantial effort on the part of the federal government, is well taken. And were there a rational opposition party in place to advocate for a more appropriate or effective solution it would have substantial weight.

Unfortunately, the current crop of GOP congresspeople seem committed to opposing the Obama administration, and the Democratic majority in Congress, on every initiative and proposition. The level of spite and malice involved in their unthinking nay-saying is palpable. One need look no further than the initial budget debate to see proof: in response to a dense, carefully calculated budget proposed by the Democrats, the Republicans produced a couple dozen pages of theoretical waffle with not one single quantifiable alternative proposal to present. The recent kerfluffle with Somali pirates is equally indicative: no action taken, deferred or prevented has been met with anything but derision, and many condemnations overtly contradict the others. The GOP has indeed become the Party of No, squealing like a small child who has just discovered its new favorite word and ignorant of the meaning or consequences of its use.

Faced with circumstances like these, and able to present a majority government in both branches tasked with enacting legislation, the Democratic party has little choice but to use the methods available to it. If that means bypassing the irrationality presented by the opposition, then that is obviously what must be done to achieve progress.

I know too little of the new healthcare initiative to comment intelligently on it at this time. However, I know more than enough of the current system to say with conviction that it is well and truly broken, perhaps irrevocably. If healthcare is to remain a resource available to the citizens of the US it must be rethought substantially, and rethought soon. Should this new programme be at all productive I believe it worth the risks. And swelling the federal bureaucracy to achieve that, after the lessons of the last twenty years, is far more easily remedied than might be thought: the only uncertainties are in how that reduction would be accomplished and whether the resultant costs are worth preserving the small-government ideal.

UPDATE: As to the "radical departure from congressional precedent" Carl mentions, ThinkProgress has an effective rebuttal.

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