Would Kerry be more fiscally irresponsible than Bush?

by on July 9, 2004 at 9:58 am in Current Affairs, Economics, Political Science | Permalink

Virginia Postrel says yes; read more here. Paul Krugman suggests Kerry will repeal the tax cut [tax shift, more accurately] to spend more on health care, rather than trying to restore a balanced budget (my words, not his). Can these two luminaries, not always in total agreement, be wrong?

No doubt, if you look at what Kerry says, it sounds like he will spend more than Bush. But the ever-perceptive Jane Galt reminds us that, well…politicians are liars! (Just don’t let on you heard it here…)

I look less at what politicians say, and more at what kind of coalition they would have to build to rule. The high domestic spending of Bush I take as a sign of perceived political weakness (“we need to buy more allies”), rather than a reflection of Bush’s ideology. So in part it depends on what a Kerry victory would look like. But here are a few reasons to think Kerry might be more fiscally responsible:

1. The Republicans will still probably control the House and maybe the Senate too, check out the odds. The political benefits from spending are less, the less you control the content of that spending.

2. The Republicans become more fiscally conservative in opposition.

3. Kerry’s supporters hate Bush, most of all, for what is perceived to be his “Texan-evangelical-grammatically challenged-frat boy” symbolism [just for the record, I don't buy this picture]. Kerry can appease his base on these symbols fairly easily, just by showing up for work. I doubt if many Kerry supporters are expecting or requiring that a Kerry candidacy would bring a significant movement toward the left on economic policy, above and beyond repealing some of the tax cuts. The left hates Bush so much they would become captives of the center, if Kerry held the presidency. The left would have nowhere else to go (advice to the left: be careful how much Bush hatred you show!)

4. Kerry would be under constant pressure to show that he is “tough” on foreign policy. This will limit his ability to make domestic spending commitments. And if he does well on foreign policy, and appears suitably in charge, he could get reelected without much using spending to buy domestic support. If he is weak on foreign policy, will lots of spending really help him?

5. If Bush is re-elected, it affirms that a Republican can get away with jacking up domestic spending. Such a precedent is worrying for the longer run, not just for Bush’s second term.

6. Have many Presidents moved closer toward their original ideological base in their second terms?

That’s enough raw unfounded speculation for one day. But no, it is not obvious to me that Kerry would be less fiscally responsible than Bush. It’s a judgment call, but let’s not obsess over what candidates say when campaigning. Don’t forget, it was Bush who campaigned on a platform of fiscal responsibility and no nation-building.

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