Capital Gains and Games

I'll be at the Kauffman Foundation's Economic Bloggers Forum.  There is a great schedule of sessions, including David Warsh and Paul Romer and panels on the Great Recession, economic growth, and fiscal policy.  You can catch the webcast of the event starting tomorrow at 8:30 Central time.

Enjoy!

I've been saying for a while that, contrary to the GOP rhetoric that the sky is falling, the 2009 and 2010 deficits were and are the absolutely correct fiscal policies.  Back in October I called the $1.4 trillion deficit "a triumph" and said it was clear that's what needed to be done given that businesses and consumers weren't spending and, most importantly, that monetary policy had done just about all it was going to be able to do.

Paul Krugman yesterday provided three paragraphs in an excellent longer piece that explained this further:

A top House Democratic staffer just told me the reconciliation bill, with some surprises, and a tentative CBO score will be posted on the House Rules web site late tonight or early tomorrow morning.  Then a final CBO score will be posted Friday.  The Rules Committee will meet Friday to mark up the rule.  Then the House will vote on the rule Saturday, engage in perhaps four hours of debate, and, later Saturday, take the final vote on the reconciliation bill, which will deem the passage of the Senate bill. 

This morning's paper carries an op-ed criticizing health care reform primarily on the grounds that it will cost too much. It urges that the plan be sharply scaled back so that it will get bipartisan support.

If this op-ed were written by a Republican member of Congress it would be unremarkable; not even worth publishing. But this particular op-ed was authored by someone who appears to have meaningful expertise on the subject. The writer, Tom Scully, is identified as the former administrator of the Centers for Medicare and Medicaid Services and a White House official during the George H.W. Bush administration.

I wonder if the Founding Fathers envisioned that this sentence (highlighted in bold, courtesy of Harold Meyerson's column in today's Washington Post) would become so commonplace:

The civil rights leaders who have called this march don't doubt that if Obama could enact immigration reform by executive order, he would. In his meeting with them last Thursday, the president affirmed his commitment to the cause. Whether it will become his legislative priority is another question: Congress is waiting to see what Obama does, even as Obama says he needs to see some GOP willingness to enact reform (and this is certainly a cause that some leading Republicans, most notably John McCain, have supported in the past).

Why should Congress wait to see what Obama does?  Congress should do.  Obama should sign, or not.  When you march on Washington, you should be facing east from the Washington Monument, not north.

And he says in National Journal that a value-added tax is on the horizon.

There's nothing really new in Clive's column.  Bruce has been saying that a VAT is logical for a long time.  And among many others, I've been saying that the deficit isn't just a spending problem.

But the fact that Clive is now willing to go where others have boldly gone before is an important indication that the public debate is now changing and that a tax increase is becoming a topic for polite conversation.  It might not yet inevitable but it's definitely becoming more acceptable.

As you read the following from noted congressional expert Norm Ornstein, keep in mind that he's no Democratic apologist or spinmeister.  Norm is a scholar at the American Enterprise Institute, an organization no one could possibly mistake for an arm of the Democratic  Party.  I'm reprinting the whole thing so no one can accuse me of selectively quoting from Norm's piece.

Hypocrisy: A Parliamentary Procedure

Earlier this month, Nancy Rosenblum, the Senator Joseph S. Clark Professor of Ethics in Government and Chair of the Department of Government at Harvard, visited the Rockefeller Center and delivered a public lecture on the moral distinctiveness of political party identity.  She is both contrarian and clever in the way she takes apart self-styled "independents," who let their self-styled independence of thought remove any consequence they might have in electoral politics if they remain independent from their fellow voters.  She makes the affirmative case for ambitious political parties as sources of morality in politics.

The video is definitely worth your time.  For more, see her full explanation in On the Side of the Angels: An Appreciation of Parties and Partisanship.