What’s so divine about budget surpluses?

Posted: Aug 10, 2001 12:00 AM
The Democrats’ newfound affinity for federal budget surpluses provides a window into the soul of economic liberalism. It is quite interesting to observe the liberals’ transformation over the past decade with regard to budgets and the national debt. For decades liberal Democrats were the party of "tax and spend." Of course, they still are, but then they had no interest in even balancing the budget, much less striving for surpluses. (Remember how they used to have conniption fits over proposals for a Balanced Budget Amendment?) They fervently embraced Keynesian economics – deficit spending and accumulated national debt were seen as virtues rather than something to be avoided. Then something happened. Quite fortuitously, the issue of budget deficits fell into the Democrats’ political lap. I’m talking about the glorious Reagan years – that decade when the Carter domestic malaise and military impotence were reversed and patriotism was restored with a vengeance. The Reagan record was virtually unblemished, including: record economic growth with the creation of 20 million jobs without inflation, something, by the way, that Keynesian economic models (the Phillips curve) said couldn’t be done; record levels of charitable giving; laying the foundation for the disintegration of the Soviet Union and the destruction of the iron curtain; the resulting emergence of the United States as the world’s sole superpower. The Democrats had to find an Achilles' heel in order to claw their way back into political contention. Simple. They would seek to taint the Reagan record by pointing to the explosion of deficits and the national debt during the '80s. In the process, they would conveniently discard their lifelong allegiance to deficits. Henceforth, they would be deficit hawks, the party of fiscal responsibility. It was laughable on its face, but under the propaganda skills of Bill Clinton, it worked. Clinton was able to distort Reagan’s economic and global accomplishments by labeling the ‘80s as the decade of greed and fraudulently attributing the deficits to Reagan’s supply-side tax cuts. (There is no factual dispute that despite top marginal income tax rates being reduced from 70 percent to 28 percent, revenues doubled.) The deficits resulted from a combination of Reagan’s necessary military rebuilding and the Democratic Congress’s unnecessary domestic excesses. But facts never got in Clinton’s way. In one fell swoop Clinton revised history on Reagan’s successes and simultaneously co-opted the issue of fiscal responsibility. Now, Clinton and Daschle Democrats have taken it one step further. They don’t just want to avoid deficits; they want to achieve and maintain surpluses, rather than interpret them as an alarm signal that Americans have been overtaxed. For example, Sen. Lieberman on "ABC This Week" lamented that President Bush’s only accomplishment so far was to "pass his tax cut and jeopardize our prosperity." Our prosperity, he said, was under assault because the surpluses were dwindling. First, only a liberal would equate prosperity with government largesse. Only Democrats measure society’s wealth by reference to the government rather than the private sector. Lieberman further complained that because surpluses were disappearing the government would have to tighten its belt. He views this obvious positive as a negative. In Lieberman’s world, if the government is forced to be austere and the private sector flourishes, that’s not prosperity. What a poignant illustration of the liberal mindset! Daschle echoed the same sentiments, saying that congressional appropriators are "in a box," facing pressures for new spending measures while the tax cut limits the amount of funds in the budget. Yes, Sen. Daschle, that’s precisely the idea. Plus, as long as liberals are around, there will always be pressure for new spending measures. And surpluses, as recent history has shown, will increase rather than decrease that pressure. So let’s build some more boxes in which to house those poor congressional appropriators. In truth, Democrats want it both ways. They pretend to be paragons of fiscal responsibility when they can’t ever find enough government money to spend – spending erodes surpluses even quicker than tax cuts. They can’t have their surpluses and spend them too. Ultimately, their love affair with surpluses is a ruse intended to disguise their real aim to accumulate government wealth as a springboard for endless government expenditures. Though the Democrats’ vocabulary has changed, they haven’t. They still simply want our money. Unchecked, they would continue to tax and spend us into oblivion and eventually, slavery.