I also didn’t want to let this editorial at Bloomberg on the horrible mess of our fiscal policy go by without comment. I’m not sure I’ve ever seen a greater free flight of fancy. Here’s a snippet:
A comprehensive back-to-basics overhaul of Washington’s budget process is undoubtedly called for. The goals would be simple enough: Explain exactly what new spending is meant to achieve; ensure that value for taxpayer dollars will be maximized; be clear about how new commitments will be paid for; judge the long-term implications for public debt and the economy; and do all this transparently. Over the years, reformers have proposed numerous schemes with such basic principles in mind, and none have gained traction. Members of Congress would find such disciplines inconvenient, and they face no great pressure to change. For the moment, they prefer to fight about other things.
More modest reforms might be feasible, though. Washington’s fiscal incompetence is so extreme that smaller tweaks could make a big difference. Last month, for example, a group of representatives from both parties voiced support for an annual Fiscal State of the Nation — a joint hearing of the House and Senate budget committees, at which the head of the Government Accountability Office would give an overview of the country’s finances. Another bipartisan proposal, the Sustainable Budget Act, would create a new National Commission on Fiscal Responsibility and Reform. This too could be valuable: Getting Congress to pay attention to the issue would be progress in itself.
Narrower reforms are also worth undertaking. Put the debt ceiling at the top of this list. Planning spending increases as though the debt ceiling didn’t exist, and then resorting to “special measures†to avoid a foreseeable self-induced crisis, might be the single biggest absurdity in current fiscal practice. The solution certainly isn’t to ignore mounting debt. Quite the opposite. Budget measures should face the implications for debt — raising the ceiling if that can be justified — as and when the borrowing is agreed to, not later. Smarter targets, based on debt as a proportion of national income, as opposed to debt in money terms, would give a better sense of whether additions to borrowing are prudent or excessive.
I think they are missing some things that are gob-smackingly obvious:
- Both the Democratic and Republican Congressional leadership think that what they have been doing is working and from their point of view it is. They’re being re-elected year after year, aren’t they?
- Contrariwise, they think that they wouldn’t keep those jobs if they followed the editors’ advice.
I agree with the editors that we need need fiscal reform. I disagree that it is something that any foreseeable Congress will impose of its own free will. It would need to be imposed on them.
“It would need to be imposed on them.”
By voters. But as the Afghan situation demonstrates, it takes something of a colossal nature to motivate them. Perhaps inflation will do it. Perhaps not. The power of politicians promising free beer is strong as ever. And the notion that someone else will pay the freight still sells.
Electing individual representatives or senators wouldn’t have that effect. The new ones would just resume the same practices as the old ones maintained because, as noted above, that’s where their incentives are.
So, yes, it would need to come from voters but not in the way you mean. It will take a constitutional convention and Lord knows such a thing would be enormously risky.