« Democracy and Islam | Main | Sitepal rules »

A positive first step

A journey of a thousand miles begins with... a modest token gesture.

I'm not ready to start counting chickens yet, but last week's election of John Boehner to House majority leader and Bush's new budget for FY07 are positive enough developments to offer fiscally conservative Republicans a faint glimmer of cautious optimism.

The proposed spending cuts and deficit reduction are modest by any measure, but that won't stop the president's opponents from screaming bloody murder about the 0.5% cut in non-defense spending.

Well, let them bitch. They'll find something to bitch about no matter what he does, so he should at least keep his base happy by making some progress on spending restraint. Anyone who balks at a half-a-percent spending cut (more like a "nick") in the face of mounting, historic deficits, is simply not serious about controlling government spending.

We'll also hear a lot of breast-beating and teeth-gnashing about how taxes should be raised. This should be ignored as well. I'd love to see the administration oppose tax hikes on philosophical grounds, but the empirical case will be much easier to make. As others and I have pointed out repeatedly, the Bush tax cuts targeting the investment sector of the economy have not only spurred economic growth, but actually yielded more revenue in the federal treasury rather than less. (More here, from today's Wall Street Journal.) Moreover, increasing taxes is not a helpful signal to send in an environment in which we are trying to persuade our representatives to spend less of our money.

Lastly, Bush's opponents will wail that the budget doesn't spare certain sacred cow entitlement programs, such as Medicare. Well I'm sorry, they can bitch all they want to, but the simple reality is that the current growth rates of middle class entitlement programs are not sustainable. Left unchecked, the exponential growth in these programs will eventually bankrupt the treasury.

Admittedly, in a budget this size ($2.8 trillion dollars, contrary to the Post's typo) one can always find nits to pick. I'm not a hundred percent happy with it either. I'd prefer to see a much more aggressive approach to trimming budgetary fat. Still, it's the first budget proposal I can recall from this administration that actually makes the long-term numbers look better instead of worse. That's better than nothing.



oh yay...better than nothing....

How does the deficit get paid down exactly? Is it like a line-item thing like "transfer 8.2 billion to national debt"?

I should know this right?

Post a comment