Here are a few more thoughts to add to Phil’s post about conservatives’ attitudes toward budget deficits.
First, I’m not sure how to explain Mitch McConnell’s statement that all Republicans believe that the Bush tax cuts paid for themselves. Matt Yglesias is right that this sentiment is problematic. I thought, and I still think, that conservatives have moved away from that mistaken belief and from the related “starve the beast” strategy.
On the other hand, Yglesias’s claim that conservative Republicans have presided over deficit increases, while certainly true, fails to score the intended partisan point. Democrats, right now, are responsible for those deficits. If the current Democratic majority really thought that Republicans were wrong to pass the prescription drug benefit and tax cuts by adding them to the deficit, they could schedule a vote today to raise taxes. Or they could get rid of the drug benefits and let the tax cuts expire.
That’s where Ezra Klein gets into trouble as well. He writes, “[Democrats] constrained themselves for the sake of deficit reduction, where Republicans unharnessed themselves from rules meant to limit the debt. That’s how the tax cuts were passed under budget reconciliation, while health-care reform had to yoke itself to unpopular taxes and Medicare cuts in order to use the same process.” With control of the White House and Congress, however, Democrats are not only responsible for the deficits pertaining to new programs, they are also responsible for all deficits, including the ones they are so careful to remind us were created by Bush. And yet President Obama has punted on deficits, making no plan whatsoever to deal with the debt problem and instead trying to shunt responsibility onto a commission.
Second, I think that although it happens that conservatives are worried about the current deficits, that is, they are worried about the deficits that are supposed to hover around $1 trillion for the rest of the decade at least, Yglesias is right in an abstract, irrelevant sense that conservatives don’t care about deficits.
Right now the primary concern among conservatives over the deficit is that government spending is outpacing revenues in a way that creates worries about the country’s long-term solvency. They have other concerns, including ones that bear on the short term more directly, but the fear that the government’s structural deficits are going to lead to insolvency is the greatest.
Abstracting from the current situation, though, conservatives, myself included, could be fairly said to not care about the deficit. Consider the following thought experiment: this year’s deficit is expected to total about 10 percent of GDP (pdf). Increase that slightly and you approach total government spending in 1948, which was 11.6 percent of GDP (table 1.2). Current macroeconomic considerations aside, if conservatives could press a button and go to a 1948-style world in which the entire budget was 11.6 percent of GDP and all of it was deficit spending, they would do so. And in that world, the trillion-plus dollar deficit wouldn’t be unsustainable, because the government would have far more fiscal flexibility. Liberals, on the other hand, would never trade today’s deficit-ridden scenario for one in which there were giant surpluses but spending only totaled 11.6 percent of GDP. The argument is about the size of the government and the welfare state, not deficits.