What Republicans are thinking on the sequester (one man’s guess)

Ezra on Twitter asks for a Republican version of this Jonathan Chait column, which basically suggests the Republicans don’t know what they are doing with their policies on sequestration.  Ezra has himself raised similar questions.  I am not a Republican, but I do like a challenge, so here is a brief attempt.

Correctly or not, many Republicans believe some mix of these propositions:

1. Much of government spending is massively wasteful.

2. Deep historical pessimism is justified, as the United States is sliding into a morass of ever greater statism on the economic, government spending, and taxation fronts, if not right now over the next ten to fifteen years.  Currently a majority of the public does not agree with the conservative Republicans and that is where the pessimism comes from.

3. All recent Republican strategies to stop this slide have been failing (this is evident to the Republicans, although not always admitted publicly so gladly, for obvious reasons).  Furthermore, short-term deal-making and policy trade-offs, even if they represent moderate improvements, will not reverse or even much slow down this slide.

4. There is a long-term dynamic whereby the rich will get taxed more and more in an unstable dynamic, ending in the Frenchification of the American economy or worse.

OK, now let’s go to the sequester.  The upfront costs are not viewed as so high, even on the defense side (see #1).  Furthermore something must be tried (see #2).  Given #1, there is some chance the public might see that government spending can be cut without causing disaster and this gives some chance the public might then support yet further cuts in government spending.  Maybe this chance isn’t so high, but all other approaches have been failing (#3).  Ideally, a big budget deal might be better on paper, but a line must be drawn in the sand on taxing higher earners (#4), especially given recent tax hikes, so right now a big budget deal is out of the question; this isn’t 1986 any more.

Draw up the Venn diagrams, or do the expected utility calculations, and you are left with sticking to the sequester.  Furthermore it allows some Republicans to take a “victory” back to supporters, and that gives a “practical” reason to support the “intellectual” ones.  Keep also in mind that a despairing group is a skeptical group, so how would Republican voters really know or trust that they got a good bargain with the Democrats, especially given the Democrats would have to sell it as a good bargain to their voters?  Who understands baselines anyway?

Here is a related Justin Green piece.

I’m not seeking to debate the points in this post, but rather consider this anthropology.  But if you ask about my views, I largely agree with #1, have mixed feelings about #2 (lately there is evidence of the health care cost curve bending; we will see), agree with the first sentence of #3 (though with a different normative slant), and don’t much agree with #4.  In my view the ranks and influence of the rich are growing, some factions of the Democrats will become more like the old anti-tax Republicans, and I don’t see U.S. tax rates on the rich as having a big chance of reaching unsustainable or catastrophic levels.  (If anything I worry much more about regulation stultifying the economy.)  So I would myself definitely prefer a “grand bargain” to the sequester.  The grand bargain would of course raise taxes further, but I don’t see this as a “slippery-slope-beginning-of-the-end.”

That I said, I have an affinity with #1, over fifty percent of the sequester cuts are obviously good ideas, and we could reverse the worst aspects of the sequester rather easily.  So while the sequester is far from my first choice, I also don’t think it is the end of the world.  I am distressed by the number of blogs posts emphasizing the “seen” costs of the spending cuts rather than the “unseen” benefits.  I am distressed by the notion of agencies which might play the “Washington Monument” strategy.  And I am distressed by the unwillingness of both sides — and possibly Obama will end up as the greater villain here — to make the cuts more flexible.  (It is funny by the way how much Republicans distrust Obama, and yet want to give him that discretion so that he will own the costs of the spending cuts to a greater degree.)  Given all that behavior, is a total shock to think that the public — or at the very least the Republican public in the partially gerrymandered House districts — might not want to trust so much of its money with those institutions?