I didn’t realize that this weekend’s Saturday Night Live was a repeat (of a fairly recent show) until I went looking for the video of this sketch on Russian brides. Somehow it reminded me of the topic of fiscal responsibility and how some misinterpret the label of “fiscal hawk” as someone preoccupied with cutting costs and basically being a “cheapskate.” Maybe there are some who call themselves “fiscal hawks” who really do obsess about shedding costs without regard for the benefits that are lost along with the costs, but those are really “small government” (or even anti-government) types. True “fiscal responsibility” or “fiscal prudence” means weighing the costs against the benefits–i.e., giving proper consideration to both sides of the equation. Taking the cheapest option often does not make economic sense; we might be more willing to pay for a more expensive option that is truly worth its cost. Perhaps we need to keep that in mind as we work out a plan for health care reform where we’ll likely be tempted to (or even desperate to?) cut the cost of the bill in brute force, not-necessarily-smart ways.
And speaking of beautiful women (and health care reform financing), Bruce Bartlett made a fun and related analogy last Friday in his Forbes column:
[W]henever I suggest the idea of a VAT for the U.S., I am attacked by supply-siders and assorted right-wingers. The other day my friend Larry Kudlow criticized me for wanting to “Europeanize the American economy.” Their concern is that the VAT is a money machine that will lead to higher taxes and bigger government precisely because it is such a “good” tax.
I myself held this same view for many years. But eventually I decided that it was stupid to oppose something because of its virtues. Opposing a VAT because it’s too good is like breaking up with your girlfriend because she is too beautiful.