Like Brad DeLong, I’m a bit puzzled by Bill Galston’s theory that adopting “a meaningful shift toward fiscal restraint” would be a good strategy for the midterms. People say they want this, but I can only assume that’s because people think such a shift would improve the economy. In fact, it wouldn’t. If Democrats implement policies that tank the economy, running around the country saying “well it polled well a year ago!” isn’t going to help them.
People are fickle creatures, to be sure. Most people urge fiscal restraint but love the entitlements that big government programs afford them. The reason for this paradox, though, is that people don’t understand the cost of these programs so everything remains in the abstract. It’s something for nothing, or near-to-nothing, for much of the country. People might actually mean it when asked if we should have more fiscal restraint if they really felt the tax-man in their pocket-books. So we borrow instead of tax. Democrats and Republicans alike.
Also, just a quick note on the stimulus and deficits. Try thinking about the stimulus as a bubble – that same dreadful thing that caused the current collapse. When the housing bubble burst we found ourselves in our current dire straights. So what happens when the stimulus money dries up? What happens to the million jobs it purportedly saved? What makes that any different from any other bursting bubble?