Two good friends, for whom I hold a deep intellectual respect,
recently asked me whether I saw analytical flaws in Rick Ungar’s Forbes
piece, entitled Who is the Smallest Government Spender Since Eisenhower? Would You Believe It’s Barack Obama? Here’s my
response:
I don’t think there’s really a “flaw” in Ungar’s analysis,
except for the fact that the piece is not all that analytical—it’s really more
of a political spider web than it is a relevant fiscal critique. And, when you read through the comments, it’s
pretty clear that Rick Ungar as Shelob was a very effective rhetorical device.
The Republican party is not made stronger by meat heads who
base their anti-Obama argument on federal outlays during his first term. This is so for three main reasons, in my
opinion.
One, when it comes to executive fiscal restraint,
Republicans have almost no moral high ground left. 43 fought two wars without figuring out how
to paying for either, and he instituted a massive new Medicare prescription
drug benefit. 41 broke his campaign
pledge on taxes. 40 did a lot to rein in
the total cost of government, but even though his capitalist-based defense spending effectively beat
the USSR’s moribund socialist-based war machine, it still meant a large
increase in government spending. Here, if we’re honest, we have to admit that Ungar makes a reasonable point. I get that it’s hard to get elected to public
office without promising goody bags to voters, and, frankly, I’m not voting for Mitt
Romney tomorrow with a big heart-swell of libertarian optimism; I’m voting for
him because of the two candidates, he’s by far the best shot we have at a financial tourniquet, and because
he is a leader & problem solver.
Two, the lion’s share of the president’s policies’ broader
costs are either indirect or still coming.
The Affordable Care Act was sold as a means of saving money for the
Federal government. Even if it does,
which seems increasingly improbable, it does so by cost-shifting: from the “Middle
Class” to the rich; from old to young; from individuals to businesses; from
insureds to insurers; from bureaucrats to innovators. Plus, the number
of doctors refusing Medicaid patients is growing. Finally, what effect will the medical device
excise tax have on innovation in one of our key areas of competitive
advantage? Those are all indirect costs
of centralized management that add up to an absolutely huge economic cost, but
which aren’t captured in Federal outlays during 2010-12. But even ACA’s direct, probable Federal outlays (e.g.,
shoring up insufficiently funded state Medicaid budgets) won’t hit for at least
another year yet. The same holds for
Dodd-Frank: do you realize that JP Morgan already has in excess of 400 full-time
regulators at its NY office? Plus, all
of D-F’s rules haven’t been written yet.
Three, President Obama’s fiscal "sins" (no, I do not really believe they are sins) are far worse than the
sum total of the checks he cut during his first term. Focusing on spending at the exclusion of the
debt and annual budget deficits misses the larger fiduciary point. It’s one thing for a family of 4 to spend
$5,000 on a vacation when their income is $300k. It’s something else entirely when their
income is $100k. The examples here are
too many to count. Maybe I can just say
that current Federal outlays are at most a short chapter a 500 page book on President
Obama’s economic mismanagement. I’m
happy to go into those details if you want, but I’m assuming you either already
know them or otherwise don’t really care for me to, and in either case, I don’t have the time right
now to enumerate them. I’ve already tackled several of them in other blog
posts, though.
Rick Ungar is to Forbes what Al Hunt used to be to the WSJ:
the token liberal. His function for the
Left isn’t really to analyze, it’s to advocate while giving the appearance of seriousness. He poses no threats to GOP philosophy, but his "analysis" can serve as a corrective for self-reflective conservatives who yearn not to win elections, but to see government done well.
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