Politics Without Budgets

In her most recent Washington Post column Megan McArdle laments that President Biden’s proposals amount to politics without budgets:

If I have to pay for some new government program, I care a lot about whether it will be worth the money. If someone else is paying, it has to meet only the bare-minimum criteria of “sounds vaguely nice.” Which is perhaps why so much of President Biden’s address to Congress sounded more like a half-baked Democratic wish list than a coherent policy agenda.

The most striking moment was probably this one: “The Defense Department has an agency called DARPA, the Defense Advanced Research Projects Agency . . . to develop breakthroughs that enhance our national security. . . . It’s led to everything from the discovery of the Internet to GPS and so much more. . . . The National Institutes of Health, the NIH, I believe should create a similar Advanced Research Projects Agency for health.” That agency would have one purpose: “to develop breakthroughs to prevent, detect and treat diseases like Alzheimer’s, diabetes and cancer.”

“Let’s end cancer as we know it,” Biden added. “It’s within our power.”

Why was this so striking? For one thing, it has been almost 50 years since President Richard M. Nixon initiated America’s “war on cancer.” Since then, the National Cancer Institute has spent at least $100 billion on research and treatment. Though we’re certainly closer than we were in 1971, cancer remains uncured. And while I’ve spoken to a lot of cancer experts who are hearteningly hopeful, none suggests a cure is a sure thing so long as we spend enough money.

Biden’s assertion that all we need is DARPA for cancer encapsulates his administration’s style — as well as its contrast with the style of our last Democratic administration.

The National Cancer Institute is doing great work on innovative treatments, notably the immunotherapies that are already revolutionizing cancer care. If the administration thinks there are gaps in the institute’s research program, by all means identify and fund them. But what in tarnation does DARPA for cancer add that NCI won’t?

concluding:

The less constrained Biden administration, by contrast, seems willing to float anything that promises any benefit to anyone, running as far down the Democratic wish list as bond markets or voters will tolerate. We’re barely having an argument about whether this spending is worth what it costs (and, if it is, why can’t we just ask taxpayers to pay for it?).

Because in the end they’ll have to, even if we put it off for a while by borrowing money or printing it. And when that bill comes due, it would be nice if we could look back and think that, in the main, what we got in exchange was worth it.

If you only reckon hypothetical benefits and ignore the likelihood of those benefits materializing, their cost, or their return on investment, it’s pretty easy to pass cost-benefit analysis. That’s why, in my post on mission statements, I enumerated several criteria for limiting wish lists like those to which we were treated on Wednesday evening:

• It has to be achievable.
• It has to be achievable by the means proposed.
• It has to be achievable by the means proposed within a stated timeframe.

There are a couple of criteria I didn’t mention:

• It should be paid for.
• The cost of the secondary effects should not outweigh the net benefits of what is being proposed.
• There should be consequences for failure to meet the proposed objective other than not being re-elected.

We genuinely need to recognize that we are setting the stage for a future in which interest payments crowd out other spending and we will be impelled to fully monetize the debt or default.