An interesting proposal has been brought forward by Representatives Jeb Hensarling, Mike Pence and John Campbell, to limit government's share of GDP to 20%, enshrined as an amendment to our constitution. Since World War II, government spending has averaged about that percentage, but CBO shows this percentage exploding over the next 25 years. If we tried to pay for the spending increase CBO projects, the representatives claim:

...they would have to more than double in order to pay for what will be spent under current law, insuring that future generations simply would not have the freedom and opportunity that Americans currently enjoy. According to CBO, by 2050, individual income tax rates would have to be increased by about 90 percent to finance the spending between then and now. By 2082, tax rates would have to more than double with a potential tax rate on the highest incomes of 88 percent. �Such tax rates would significantly reduce economic activity and would create serious problems with tax avoidance and tax evasion.

This brings me a real sense of deja vu, as many years ago I was a research assistant to Prof. Craig Stubblebine at Claremont Men's College (now Claremont McKenna College.) Stubblebine was part of the early efforts in the late 1970s and early 1980s to get real spending limits on the Congress. (I arrived in Claremont in 1979, and worked with Prof. Stubblebine in 1981-83.) Known as S.J. Res 56 back then, it passed one chamber only to be shot down in the other chamber with much sleight of hand. They tried again later to get the amendment passed by attaching it to the Gramm Rudman Hollings bill, which Gramm at least supported including the constitutional provisions. But it missed a two-thirds passage by a single vote and was not included, and fervor died with passage of GRH.

(I'll note the spending limitation amendment now proposed -- SLA for short -- is not the same as what was tried thirty years ago. A balanced budget amendment was included in it, waivable by a 60% vote in each chamber. Taxes were limited as a share of national income. In some ways, that bill was closer to the Taxpayer Bill of Rights than is SLA, as its authors admit.)

While I doubt this bill will see the light of day in this Congress, the possibility that Republicans could take over the House of Representatives may make SLA a part of that party's platform for the elections. That will be a cheerful thing, but the 2/3 provision for constitutional change may make this not much more than advertising that that party is taking its spending problem more seriously. It's a good start, but it needs to do more to convince voters it has forsworn its past profligacy.

Labels: economics, it's the spending stupid, Republicans

Minnesota Majority, a conservative advocacy group, has made a nice video of Ronald Reagan from his first inaugural address (text here.) Here's the video they made:

I like this passage. But what I found in MM's description was this:

When Ronald Reagan took office on January 20, 1981, our nation was facing a terrible economic crisis, similar to what we are experiencing today. This video contains excerpts of Reagan's first inaugural address. His prescription to solve the economic crisis was vastly different than the policies being pursued by the Obama administration.

Emphasis mine. But the speech describes a far different world than the one Obama is in. Reagan said:

These United States are confronted with an economic affliction of great proportions. We suffer from the longest and one of the worst sustained inflations in our national history. It distorts our economic decisions, penalizes thrift, and crushes the struggling young and the fixed-income elderly alike. It threatens to shatter the lives of millions of our people. Idle industries have cast workers into unemployment, human misery and personal indignity.

Those who do work are denied a fair return for their labor by a tax system which penalizes successful achievement and keeps us from maintaining full productivity. But great as our tax burden is, it has not kept pace with public spending. For decades we have piled deficit upon deficit, mortgaging our future and our children�s future for the temporary convenience of the present. To continue this long trend is to guarantee tremendous social, cultural, political, and economic upheavals.

You and I, as individuals, can, by borrowing, live beyond our means, but for only a limited period of time. Why then should we think that collectively, as a nation, we are not bound by that same limitation?

Who among us would think that story is similar to today? Inflation has not been an issue this past decade -- if anything, we faced deflationary pressures in the recession and may yet face more. Tax rates in 1980, particularly on high-income earners, were much higher than they are now -- in fact, twice as high at the top end. Productivity growth was substantially higher in the late 1980s and 1990s than in the 1970s, and so far has accelerated through this recession.

I certainly have said enough to readers to understand that I think Obama fiscal policy has made several missteps. But a simple hearkening to the days of the Gipper is a poor substitute to thinking through new policies.

This isn't new. We have people constantly holding up conservatives against the Reagan yardstick and finding out nobody measures up. The recent kicking of Paul Ryan is but one example. But none of them would know what Reagan would have said about this current situation or how he would have voted. Rep. Ryan has explained his votes; you can draw your own conclusions, but suffice to say purity is a rare thing.

As are parallels between 1981 and 2008-09.

Labels: economics, Reagan, Republicans

I have resisted speaking on the Norm Coleman for governor debate that rages around the MN blogs, but some posts have I think been more than a little disrespectful. Without naming names, I can characterize most of the discussion among the right and center-right blogs as being of the following varieties:

• those that support Coleman (rare in the blogosphere, though I have heard it from activists here);
• those that argue the candidate they like is better than Coleman, even though they like Coleman and would be willing to support him if their preferred candidate exited the race;
• those that think Coleman cannot win;
• those that think it bad or wrong that Coleman would join the race at this time, that it's disruptive or somehow harmful to GOP aspirations;
• those that dislike Coleman and have for a long time because he isn't "conservative enough" for their tastes.

The last group bothers me in their vitriol, but many blogs thrive on it and for the most part my decision is not to read them. (Their quotes come to my via other blogs.) Sometimes they strike me as people who would rather be right than win, think it's better to lose an election to win back the party's soul. Just to remind them, there was a 16 year gap between Goldwater defeat and Reagan's election.

But the penultimate group bothers me as well because while the writer can certainly "see through Coleman" she or he does not trust the others at the state party convention to do so as well, thus losing the endorsement. (Let me add that I fully expect if Coleman asked for the endorsement and failed to get it, he would not run in the primary. I would be the first to voice disappointment if he did challenge the endorsed candidate in the primary. The other party does that; Republicans don't.)

There is a process by which one gets the endorsement. Whatever happened to "let the best man win?" Why would it produce a candidate that cannot win? If it would, then it's the process that has the problem, not the candidate. Any party member in good standing has the right to seek the endorsement and, after all his troubles last year, Sen. Coleman should have that right as much as any other GOPer.

Either trust the process or fix it. Don't use disrespect and bile to cover your lack of faith in your fellow party members to pick the best candidate.

Labels: elections, Republicans

It's not "care" and it's not "insurance" it's "CONTROL" of 1/6 of our economy, period. If you are so sure we have problems, check out waiting times, MRI availability, etc. in other nations. It's not pretty.

How to stop it? This article on Scott Brown, taking on the Kennedy/Democrat/control machine in MA describes the best chance Republicans have had in a very long time, to get some balance in the MA representation group in DC. In addition, Scott's election could derail the health hurricane that will affect all of us, including those of you who are so enamored with central control.

If you can possible make a contribution to Scott, please do. Info is here - yes, I sent a check yesterday.

Labels: elections, health, Republicans

Political insiders throw around names: Pelosi, Reid, etc. as though people know that these abysmal leaders are Democrats. Hello, conservative pundits - John Doe does not know these people are Democrats.

As Henry Ford was reported to say, "I don't care what the reason is, just spell my name correctly." When conservatives and Republicans only throw out names. it provides free publicity for them.

Hint: "Democrat Pelosi, Democrat Franken, Democrat Reid, Democrat Barney Frank, etc. "

Labels: Democrats, elections, Republicans