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Ultimately, Ostrich Voting Gave Us the Budget Crisis

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LAURA D'ANDREA TYSON <i> is professor of economics at UC Berkeley and research director of the Berkeley Roundtable on the International Economy</i>

Who is more to blame for the current budgetary catastrophe? Is it the President and his aides? For months they arrogantly refused to concede the need for new revenues, despite mounting deficit projections. And they stymied the negotiation process until the 11th hour by their adamant insistence on a capital gains tax cut whose benefits they misjudged and misrepresented. Or is it perhaps the Congress? For years, the members of Congress have shunned significant spending cuts in popular programs that could not be soundly financed on the existing revenue base.

The question of apportioning blame between the President and Congress for the nation’s budget fiasco seems hotter than the question of who will win the World Series. However the blame is finally shared, neither institution of government will escape censure. Unlike the World Series, there will be no clear-cut winner in the nation’s high-stakes budget crisis--only losers.

The American public is fed up with the President and the Congress. How could a great country whose young people stand exposed in the Saudi desert to defend the rights of others fail to solve its own budgetary crisis? Haven’t the people been let down by their elected officials? Don’t they deserve better?

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But these questions fail to come to grips with a fundamental reality: The budgetary antics of Congress and the Administration are directed by public opinion. The deal proposed by the budget summit didn’t hold for one simple reason: The people raised their voices against it. By an overwhelming margin, Americans told the Administration and the Congress that the budget proposal was unacceptable. And responsive, democratically elected officials reacted to their concerns.

Seen in this light, the defeat of the proposal can be considered a great victory for American democracy. But it was a hollow victory, revealing profound weaknesses in the contemporary American polity. A well-functioning democracy depends on enlightened self-interest, on an informed electorate occasionally willing to understand the need to make tough choices and capable of making private sacrifices for the collective good. The American electorate does not appear to fit the bill.

The message sent to government officials by those Americans who bothered to vote in the elections of the past decade was clear:

Don’t disturb us with the facts. Either we cannot understand them or we don’t want to try. Entertain us with nasty commercials and 60-second sound bites. Throw in sex scandals. Wrap yourself up in the flag, but don’t ask us to reduce our consumption to support the ideals on which the nation was built. Assure us you’ll keep Willy Horton off the street but don’t spend our money to educate the young children most likely to become the Willy Hortons of the next generation.

Pander to our greed. Tell us that if each of us just gets as rich as possible, we’ll be making a great social contribution. Reassure us that those who fail do so because they are undeserving, not because the country has failed to provide them with the educational and family support systems necessary to economic success.

Charm us. Reassure us. Entertain us. Don’t give us boring analyses of the budget and trade deficits; most of us can’t tell one from the other anyway. And whatever you do, don’t give us any bad news. At best, we simply won’t pay attention. At worst, if you make us feel bad enough, we’ll hold you responsible for our difficulties.

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In 1988, the voters read Bush’s lips even though there was overwhelming evidence that the federal deficit would not disappear by itself. Anyone who bothered to look at this evidence--and precious few did--could see that significant real cuts in spending and significant real increases in taxes were required to restore budgetary sanity.

But the T-word was banned from political discourse. And Bush, who pretended that there was no budgetary problem, was rewarded with an overwhelming victory. (His opponent, to be fair, was only marginally more candid; the problem is general and pervasive.)

Perhaps Bush’s most irresponsible behavior then was his mockery of the National Economic Commission, a nonpartisan panel of experts established by Congress to come up with an effective and equitable budget-reduction plan. If the newly elected President had informed the American people that the nation faced a budgetary crisis and that the recommendations of an expert commission were needed to solve it, we might have been able to act when the economy was strong.

In a booming economy, the pain of austerity would have been less severe. Instead, the bill is coming due at the worst time, when the economy is sliding into a recession that can only be aggravated by spending cuts and tax increases.

Of course, the President’s decision to postpone the day of reckoning reflected the public’s mood. Ostrich politics by America’s elected officials is the mirror image of ostrich voting by the American electorate. If the nation is to restore sanity to the budget and the budget process--and do so in ways that address the economic and social ills that threaten living standards--the American electorate must stare some harsh economic realities squarely in the face:

We are not overtaxed. Quite the reverse. The United States ranks at the bottom of the advanced industrial countries in terms of its overall tax burden. We cannot afford to fund Medicare, Social Security and other spending programs that serve the middle class; run a competent and efficient government; fight drugs, AIDS and crime; build a modern infrastructure; support a first-rate military, and offer a minimum of support to the disadvantaged without significantly higher revenues. The numbers simply do not add up. It is childish and irresponsible for American voters to insist on their favorite programs without providing the necessary revenues to finance them.

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Second, the nation has been living beyond its means for more than a decade. Now we have to pay at least part of the bill--some belt-tightening is the unavoidable result of high living in the high-rolling 1980s. If we try to duck the problem, it will only get bigger. Each dollar of deficit spending today represents more than a dollar of debt repayment tomorrow.

Third, the budgetary decisions of the 1980s disproportionately benefited the wealthy. Spending programs for the disadvantaged and tax burdens for the wealthy were slashed in real terms. Even Republican pundits concede that the gap between the rich and poor has widened. Not surprisingly, polls show that the overwhelming majority of Americans believe that the wealthy bear a disproportionate share of austerity.

But given the magnitude of the nation’s budgetary shortfall, higher taxes on the wealthy--although warranted--will not suffice. Most Americans will have to accept sacrifices in the form of higher taxes or cuts in popular spending programs. Only the most disadvantaged should be protected from austerity.

Is the Administration or the Congress to blame for the mess we find ourselves in? This is the wrong question. They both gave us what we demanded. The fault, dear reader, lies not in our elected officials but in ourselves.

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