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The “Radical” Center

June 24th, 2010 . by economistmom

While on the Fiscal Wake-Up Tour, David Walker used to refer to those who take moderate/bipartisan positions on fiscal responsibility (e.g., suggesting that a mix of tax increases and spending restraint is needed) as the “sensible center.”  In his Washington Post column today, Matt Miller suggests this centrist position is no longer “sensible,” but “radical”:

It’s striking that both liberals and conservatives are convinced nowadays of the imminent demise of the other side’s governing philosophy. The left says the shocking toll of BP’s recklessness and Wall Street’s greed proves the folly of deregulation and unfettered markets. The right looks at Greece, Europe’s welfare strains, and Britain’s stunning new austerity budget and shouts with similar fervor that bloated government is on borrowed time.

The fascinating thing is that both groups are correct about the obsolescence of the other side’s key premises, yet blind to the staleness of their own. What partisans on neither side seem to sense is that events are poised to consign many traditional priorities of both conservatives and liberals to the ash heap.

You’d never know this from the phony way public life is conducted. While independents are America’s largest voting bloc, the left and right retain a stranglehold on the debate. Only the shrill prevail. On TV, talk radio or the campaign trail, it’s almost impossible to hear the kind of common sense that takes us beyond the usual partisan tropes.

Think about it: How often do you hear the same pundit or politician say that (1) we need to reform Wall Street compensation so bankers can’t get rich taking gambles whose losses get picked up by taxpayers (”liberal”), and that (2) Social Security’s growth needs to be trimmed (”conservative”)? Or that (1) we need to scale back gold-plated public employee pensions (”conservative”) and (2) raise taxes in sensible ways to fix our fiscal woes (”liberal”)?

These ideas aren’t inconsistent or incoherent — they’re pragmatic responses to the challenges we face. But our entire system conspires to ban the expression of a practical synthesis of the best of “liberal,” “conservative” and more eclectic views.

That’s why what Steny Hoyer said on Tuesday was considered by most of us who really do care about fiscal responsibility (and not just low taxes or just more spending) as very brave.  (And today the Washington Post editorial board tips their hat to him.)  Hoyer did get more specific about a list of sensible, bipartisan policy ideas that are clearly broadly tough choices–not just the “freebies” that sound like they would cut only “wasteful” spending or raise taxes only on evil corporations or the super rich.  And for a long time now (pretty much since we said “easy come, easy go” with the Clinton-era surpluses), talking plainly and sensibly about what it takes to achieve fiscal sustainability has become more and more a radical thing to do.

…And yes, I have heard that Peter Orszag is leaving OMB and the Obama Administration, and, yes, I’m hopeful that once he’s out of the Administration, he can get back to talking more “radically,” too.  (Perhaps his version of David Stockman’s “Triumph of Politics” is coming?)

9 Responses to “The “Radical” Center”

  1. comment number 1 by: AMTbuff

    Caring about fiscal responsibility is not brave. Campaigning for and voting for specific legislation to close the long-term gap is brave.

    We have seen nothing of that from either party. Hoyer deserves even less credit than Bush does for his half-hearted attempt to reduce Social Security’s promises. I want one party to stand for sanity, lose an election because of it, and come roaring back to dominance after the crisis hits.

  2. comment number 2 by: SteveinCH

    The only problem is that Congressman Hoyer did not advocate any of those things (except for letting the Bush tax cuts on “the wealthy” expire). He listed them as potential items. Now, were he to actually advocate some bunch of them as a solution, we could proceed to have a discussion.

  3. comment number 3 by: AMTbuff

    The only problem is that Congressman Hoyer did not advocate any of those things

    That’s exactly the same as Bush with Social Security. He recited a list of possible changes and asked others to put together a plan. Nobody assembled a legislative proposal, Bush never supported any particular plan, and Democrats attacked to pre-empt any attempt at legislation.

    I want one party to willingly accept this kind of attack. It will hurt politically in the short term, but the arrival of the crisis will prove that the attack was financially irresponsible and a complete lie. The party that made the attack will be discredited for a generation.

    So far Paul Ryan has gone the farthest along the road of fiscal responsibility, but even his supporters have little idea of the magnitude of promise-breaking that his plan would require. (Ryan obscures this by proposing numbers without the associated policy changes.) Only a crisis will make the necessary degree of change palatable.

  4. comment number 4 by: BillSmith

    At least it now appears that cutting spending can spur growth too…

    Governments have proven they can spur expansion by focusing their belt-tightening on spending cuts rather than tax increases, according to studies by Harvard University professor Alberto Alesina and Goldman Sachs Group Inc. economists Kevin Daly and Ben Broadbent.

    “There have been mountains of evidence in which cutting government spending has been associated with increases in growth, but people still don’t quite get it,” Alesina said in an interview. He made a presentation to European finance chiefs on the topic during their April meeting in Madrid.

    http://www.bloomberg.com/news/2010-06-21/cameron-bets-on-prosperity-from-austerity-while-obama-pushes-more-stimulus.html

  5. comment number 5 by: VAT Brat

    “Radical Center” is a nonsensical term. Someone can be extreme right or left but still be fiscally responsible. The “solutions” to our budget crisis are ultimately partisan decisions. Obama, Pelosi, and Reid have the power TODAY to pass a spending plan that reduces the long-run deficit. Instead of attacking their cowardice and insincerity, we get to hear pundits and think thankers whine about the lack of a radical center. Their proposals are the equivalent of putting duct tape over a leak in a water pipe.

    We have a systemic flaw in our political system that rewards politicians who do not reconcile their policies with the means to pay for them.

    Until increases in the public debt limit are placed beyond the reach of Congress, we will see financial mayhem or dictatorship before anything changes.

    A Debt Limit Referendum (DLR) could force elected officials to beg permission from the public to raise the public debt limit. A DLR would force the President and the Congress to campaign on their plan for reducing deficit spending before the public would consent to raising the debt limit. Any politician or party that refused to offer fiscally coherent policies would be marginalized.

    We want our federal government to behave more like our state governments. That shouldn’t be too hard to do.

  6. comment number 6 by: John Bailey

    We need to deal with Social Security, Federal civilian and military retirement, state and local pension funds, the Pension Benefit Guaranty Corporation, Medicare, Medicaid, state and Federal retiree health benefits, private health insurance, the tax code, Federal, state and local spending, unemployment, underwater mortgages, Fannie, Freddie, et.al., bank failures, the FDIC, and the Federal debt.

    Until people (Diane, Dave, Orzag, Cato, Brookings, Heritage, et. al.) have the courage to talk about the problems openly and start discussing solutions (see Debt Limit Referendum above), the disaster keeps coming closer.

    John Bailey

  7. comment number 7 by: Unsympathetic

    Cuts to Social Security and the military must not be the only options on the table.

    Tax increases on the wealthy must be a part of it as well. The last time the the top upper tax rate was over 80%, the US economy had larger GDP increases than the present.

    Tax cuts on the wealthy do NOT produce jobs, Diane. Tax cuts on the wealthy generate nothing but more yachts for the wealthy.

  8. comment number 8 by: SteveinCH

    Boy oh boy, you must be new. First off, this blog is all about tax increases.

    Second, have a look at the CBO effective tax rate analysis. It shows conclusively that, since 1979 tax rates are down for all income groups but rates have fallen the most for the least well off and least for the most well off.

  9. comment number 9 by: SteveinCH

    Oh wait, the last time the top marginal tax rate was over 80%, the price of gas was below $1/gallon. Do you mean to tell me that will happen too if only we increase tax rates?