…because I’m an economist and a mom–that’s why!

The Washington Post’s Steven Pearlstein: Born Again?

May 20th, 2009 . by economistmom

Steven Pearlstein has a column in today’s Washington Post called “Budget Scolds Shouldn’t Drown Out the Chorus Calling for Health Reform.” I guess I qualify as one under Steven’s definition:

In the political menagerie that is Washington, there exists a species known as the budget scold — analysts, advocates, editorial writers and politicians who possess a fierce determination to bring the federal budget into better balance.

Budget scolds have a wonkish demeanor and a skeptical outlook. They possess an undue fascination with rules and processes, and speak in the arcane language of baselines, sunsets and pay-fors.

Perhaps I find the terminology “budget scolds” a little less insulting than E.J. Dionne’s characterization of us as “deficit carpers“… But Steven truly puzzles me when he launches into his case for telling me/us to “back off”:

There have been times when the budget scolds have saved the country from short-sightedness and pulled us back from the fiscal brink. There have been other times — and this is one of them — when their well-intentioned hand-wringing borders on the politically naive and threatens to derail much-needed reforms.

What is it about our “hand-wringing” this time that will “derail” something wonderful from happening, when in the past it has “saved” us from fiscal ruin?  Why will our worrying about the costs of health care reform prevent our nation from pursuing the benefits of such reform?  Steven later refers to our worry as putting a “straightjacket” on the prospects for health care reform.  I think our worry is more akin to putting on a “thinking cap” on health care reform.  Budget constraints don’t derail reforms; they force smarter, more thoughtful reforms that weigh costs against benefits and prioritize accordingly.  How do humans behave when unconstrained?  Think all-you-can eat buffets or open bars or my example in my very first blog post about being turned loose in a shopping mall for a five-minute all-you-can-grab “free” shopping spree when you are later handed the bill… The outcome is never pretty, and there’s typically a lot of post-binge regret.

So what is different this time around, that makes reminders of those budget constraints now obstructionist rather than helpful?  Steven tries to explain:

Do you think, maybe, we could cut the guy [aka President Obama] a little slack? After all, he’s been in the job all of four months. He inherited two wars and the worst economic crisis in 75 years. And he came to office after an eight-year orgy of tax cutting and spending.

Ah, so what’s different is it’s President Obama’s policies now…  I do agree with Steven that this President’s a lot more likeable, inspiring, and smart.  And I voted for him and support most of his policy proposals.  But let’s face it:  what Steven describes as that “eight-year orgy” of tax cuts (and spending, but really Steven mostly means the tax cuts) is largely being continued in President Obama’s budget.  As I’ve pointed out before, the Obama budget chooses to continue $2 trillion worth of the $2.6 trillion (over 10 years) in Bush tax cuts–and not just continue them, but deficit finance them.  (Extension of the “Bush tax cuts” is the largest single piece of deficit spending in President Obama’s budget, by far.)  I know that Democrats (including myself and my various bosses on the Hill) criticized the Bush tax cuts for years as being “obscene” because of  both their cost and their distribution (tilted too much to the rich), but that cost part–that it added trillions of dollars to the debt and the burden left to our kids–was still most of the “obscenity” of it all.  Are those tax cuts no longer part of some obscene “orgy” now that they’re being proposed by President Obama and could very well become known as the “Obama tax cuts” from now on?

And speaking of those (obscene) tax cuts, in today’s online discussion of Steven’s column on, Steven had this response to a reader, where Steven seems to space out on the sheer magnitude of these deficit-financed tax cuts, while acknowledging that he’s not that fond of all the tax cuts in the President’s budget (emphasis added):

Washington, D.C.: Health care reform is important; I certainly want to see it happen. But I can only truly embrace a plan that doesn’t tie our hands further. Don’t you think that with all of the spending on the stimulus, bailout, etc., something (like tax cuts) has got to give?

Steven Pearlstein: Yes, I wish Obama had not given out so many tax cuts. Its not a huge impact on the budget, but I think it was unnecessary. Middle income people value tax cuts but they value a good budget even more.

Finally, Steven closes his column with this:

In all of history, no revolution was ever made by budget analysts. Health reform requires leaders with the foresight and confidence to take a leap into the unknown.

Of course budget analysts don’t cause revolutions (if we were that exciting we’d be invited to more parties)–but perhaps, by Steven’s own earlier admission, they’ve helped our nation avoid some fiscal disasters.  The role of the “fiscal hawk” (a bit better-sounding than “scold” or “carper”) is to force policymakers to “get a grip”–not to encourage them to jump off a cliff with “faith” in a presently-invisible fiscal parachute that might or might not materialize.

So I conclude that Steven has somehow become “born again” in the glow of our very inspirational new President.  (About a year ago, I was highlighting here how well Steven explained how our nation’s “living beyond our means” was catching up with us.)  But as inspiring as I find the President, too, I know that he still doesn’t have it all right (he isn’t fiscally perfect, as his budget demonstrates), and that he still has to work with a much more imperfect Congress.

2 Responses to “The Washington Post’s Steven Pearlstein: Born Again?”

  1. comment number 1 by: Becky

    Besides spacing out on the impact of the tax cuts on the budget, I also thought the rest of his comment was off. He says middle class people value balanced budgets more than tax cuts. This is laughable. Americans (pretty much everyone who isn’t a budget scold) eat up tax cuts the same way they gorge at buffets. Tax cuts are significantly more politically popular than balanced budgets, as are oversized benefits packages. Because Americans value low taxes and significant benefits is exactly why we have budget issues. Pearlstein was out in left field on this one.

  2. comment number 2 by: Jim Glass

    “In all of history, no revolution was ever made by budget analysts.”

    Though lots of revolutions have been made by busted budgets. Talk to Louis XVI … the people of the Weimar Republic about how that worked out … anybody who lives in South America…

    “Health reform requires leaders with the foresight and confidence to take a leap into the unknown.”

    This squares with “First do no harm?” how?

    Responsible leaders do not take great leaps into the unknown … especially unfinanced great leaps into the unknown.

    As a leader, taking a great leap into the unknown, unfinanced on top of it, is pretty much the definition of irresponsibility, gambling with other peoples’ welfare and money, at poor odds.

    There’s a very simple test of whether a health care (or any other) program is actually worth it to the American people. You explain it to them in full. Then you tell them “So you will pay for it as of the day of enactment through an immediate tax increase, sufficient to cover its accruing cost on an actuarially sound basis, in full.” Then you have them vote on it.

    If the voters are willing to pay for it, then it is worth it for them. If they aren’t, it isn’t. Simple. Done.

    If this had been done with Medicare and Social Security we wouldn’t be in a $50 trillion hole when starting out with national health care.

    Charging a “down payment” doesn’t cut it. Nor does saying, “don’t worry about the cost, we’ll handle that when the program matures”. Nor does Feed the Beauty, get people hooked on the free version of a program up front, send them the big surprise bill later.

    Those are vote-buying scams. If a used car salesman scammed one of our children that way, we’d want the guy sent to jail, and he likely would be. Congressmen who work those scams on a vastly larger scale should be in jail too.