Brad DeLong’s fiscal plan

You'll find it here and I agree with much of it.  I would phrase the rhetoric differently, but let's put that aside.  And also let's assume — as is likely the case — that Obamacare is here to stay and thus that is taken off the table.  The most important development is simply that Republicans (and Democrats) support the potential for Obamacare to reduce the rate of growth of Medicare expenditures.  That is the #1 issue in fiscal policy today.  And it saddens me how infrequently it comes up, except to be attacked.

I get nervous when I read Brad's phrase "commit immediately," which appears repeatedly in the post and it appears in critical moments.  I favor the specified commitments but I also think they are highly unlikely.  The phrase "commit immediately" is almost an oxymoron, as the call for immediacy highlights that no one to date has made such a commitment or wants to or, in all likelihood, will, until of course an emergency comes, as with the passage of TARP.

This "don't commit, rather do it now" reasoning is easy to understand when the Democrats pushed for a rapid passage of Obamacare, or when we look at the frustration with the stalled repeal of DADT.  Few on the left thought that "precommitment to do" was a viable option in those cases, so the push was "do it now," even if that was not convenient in terms of the election or, in the case of DADT, relations with the Pentagon.  Yet when we return to fiscal policy, the talk is once again of "commitment."  I fear it is a placeholder for the idea of "no commitment."

What's the best fiscal policy when there is no commitment?  I say let the Bush tax cuts expire fairly soon, so that spending feels to the public like it has a cost.  (It's become increasingly clear to me that when it is possible for taxes to fall again that they will do so; I am less worried about high tax rate lock-in than I was fifteen years ago.)  Have prominent Republicans endorse the better parts of Obamacare.  Continue QEII but no second fiscal stimulus and no extension of any Obama tax cuts, which were a mistake in the first place.  Carbon tax if possible but it's not.  Reindex Social Security ASAP.  Cut discretionary spending where you can.

That's my fiscal recipe, for this lovely Wednesday morning, sans commitment.  Like Brad's proposals, it won't happen, but it feels "merely impossible," as opposed to impossible at a more fundamental metaphysical level.  Should that distinction matter?

Oh, and get rid of DADT during the lame duck session of Congress.  Ha. 

Addendum: Interfluidity has brilliant, and related, remarks.  The best post I've read in some time.


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