Battlepanda: Bizarro world "starve the beast"?


Always trying to figure things out with the minimum of bullshit and the maximum of belligerence.

Saturday, December 23, 2006

Bizarro world "starve the beast"?

Mark Thoma and Brad DeLong quote extensively from Paul Krugman's latest NYT column, in which he argues that Democrats should abandon Rubinomics. Krugman writes:
Now that the Democrats have regained some power, they have to decide what to do. One of the biggest questions is whether the party should return to Rubinomics -- the doctrine, associated with former Treasury Secretary Robert Rubin, that placed a very high priority on reducing the budget deficit. The answer, I believe, is no. Mr. Rubin was one of the ablest Treasury secretaries in American history. But it's now clear that while Rubinomics made sense in terms of pure economics, it failed to take account of the ugly realities of contemporary American politics. And the lesson of the last six years is that the Democrats shouldn't spend political capital trying to bring the deficit down.
I wish that Profs. Thoma and DeLong had offered some commentary on this column, because (a) I admire both of them as liberal economists, and (b) this Krugman column makes absolutely no sense to me. It sounds like some sort of Bizarro World version of the "starve the beast" hypothesis, and makes just as little sense.

Republican version of "starve the beast": A high budget deficit is a good thing for the Republican Party, because it will prevent the Democrats, when they inevitably come to power, from enacting their dangerous, expensive right-wing agenda.

Democratic version of "starve the beast": A high budget deficit is a good thing for the Democratic Party, because it will prevent the Republicans, when they inevitably return to power, from enacting their dangerous, expensive right-wing agenda.

Let's set aside any arguments that a high budget deficit is actually a good thing economically, since it's clear that Krugman doesn't believe that. He thinks it's a somewhat bad thing, although not a terrible thing, but that the positive political ramifications of the budget deficit for the Democrats override its inherent badness.

Let me first observe that given the situation of divided government that we find ourselves in, at least one of the two "starve the beast" hypotheses presented above must be false. A high budget deficit can't prevent both the Republicans and the Democrats from enacting their expensive agendas, as it can only block the expensive agenda of the party that takes control in 2008. (If the government remains divided in 2008, neither party will be in a position to enact its expensive agenda.) Krugman seems to be betting that the Republicans will be the next party to control both Congress and the White House, whether that's in 2008, 2010, or further down the road. Given the turn of the 2006 elections, should we Democrats put all our bets on that possibility?

Second, let me ask what the most disastrous Republican policy of the past six years has been, and what the most disastrous policy is likely to be during the next period of Republican dominance, whenever that is. I'm sure Krugman would agree that the greatest recent failure of Republican Party has been in foreign policy, between the senseless Iraq War and its "What, me worry?" attitude toward nuclear proliferation that allowed North Korea to obtain nuclear weapons, and has Iran on the verge of obtaining them. And the greatest danger we face the next time the Republicans take power is that they will start another senseless war based on lies and self-delusion.

If I thought that a budget deficit could prevent another senseless war, I'd be in favor of it, even if it meant spending the money on abstinence programs and bridges to nowhere. But the warmonger faction of the Republican Party has proved that the cost of a war -- whether in lives, money, or American standing in the international community -- is no object to their crazed plans of remaking the world through American military power. The only thing that stands in their way is the good sense of the American public, which was in seeming short supply in 2002 and 2004, but appears to be making a comeback.

At the risk of committing the Pundit's Fallacy, let me suggest that the next few years represent the Democratic Party's best chance to claim the mantle of responsibility in fiscal affairs, just as we have the chance to claim the mantle of responsibility in foreign affairs. It won't keep the Republicans out of power forever, but it may buy us enough time to partially undo the damage that the Republicans have done on the international stage. It would be a shame to throw that chance away on this half-baked left-wing version of the "starve the beast" hypothesis.

UPDATE: Prof. Thoma offers some commentary on Krugman's column.