Tea Party-Two Party

Ice Ice Baby: Budget Freeze Part 2

February 21, 2010
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Check out Part 1 for an introduction and Guilder’s argument.

FLORIN: Guilder argues that those big programs shouldn’t exist anyway, but since they do, it would be impossible to reform the system to compensate if they disappeared. Despite inefficiency, they do provide incredibly important services that can’t be cut. Imagine the furor that would arise if Medicare was ended. Obama’s plan will affect too many essential programs on a scale sure to affect the economy. If you look at what he’s cutting, it’s pretty terrifying: education for the disadvantaged down 32%, lots of welfare programs out anyway from 10% to a massive 50%, and the public health and social emergencies fund is down 81%. Defense, however, is another story. Even though it is technically considered discretionary spending, it isn’t being touched by the freeze. Yes, there’s a war going on, but there are definitely aspects of the defense budget that could be cut without affecting strategy. What’s happening is that the budget freeze is affecting the wrong things.

John Maynard Keynes was a massively influential economist who basically suggested the theory that it’s good to stimulate the economy through quick and major government action. Yeah, it’s OK, I don’t really understand Keynes either. However, Nobel Prize winner Paul Krugman definitely does: as a dear disciple of Keynes, he writes that the freeze is going to hurt the economy, not help it. Not only are jobs going to go out the window, the freeze is “bad long-run fiscal policy, shifting attention away from the essential need to reform health care and focusing on small change instead.”

The government holds a social contract with the people: in exchange for essential services like healthcare, Social Security, and protection, citizens pay taxes and obey just laws. Obviously, Guilder disagrees with the need for these programs and dearly desires a cut in them, but consider a world without such protection. Life expectancy? That’s out the window. This fundamental disagreement isn’t what our debate is about, however—we’re focusing on the differences between our opinions of the budget freeze. In general, it’s not really pleased anyone. Guilder talks about a mounting deficit and how it will harm the government, but how does cutting jobs and preventing any end to unemployment help? How is taking away necessary programs, especially for the disadvantaged, going to be beneficial? Look at it from the point of the average citizen, not a theorist up in an ivory tower, and you’ll see how the budget freeze is coming at exactly the wrong time.

CONCLUSION: It’s clear that we disagree a lot, but that’s not really a new concept. We do (finally!) agree on the fact that the budget freeze appears to be completely the wrong idea, but aside from slashing defense spending, there’s a clear ideological difference. See Guilder’s follow up post for his solutions to the budget freeze. Make up your own minds, and agree with, confront, laud, comfort, yell at, and give gold stars to us in the comments!


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Two schools of thought. One intellectual barfight. Contact us at teapartytwoparty[at]gmail[dot]com.

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