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Framing the Debate

June 9, 2011

Yesterday, Kevin Williamson did his usual thorough work discussing the “apparent” disconnect between the conservative pushes for increasing growth to offset the deficit vs. austerity in the budget.  His whole argument essentially centers on the fact that growth has been on a 2% trendline for a few decades, and that we can talk about driving growth, but we have to be realistic in our expectations.  Potential Republican presidential candidates such as Tim Pawlenty have been gaining support for their growth-based economic plans.  With all that, you have to build in expectations.  If a company told Wall Street that it was going to grow at 100%, the street would likely temper that number with past history, and we have to take that into account.

So Williamson concludes:

The choice is not between growth and austerity. God knows we need a dose of both. The difference is this: Congress can impose a balanced budget (or, more realistically, a less-imbalanced one); Congress cannot impose growth. So enact a balanced-budget plan, already, or a near approximation of one, it being understood that the goal need not be a zero deficit tomorrow but an arrest of the debt pileup and a smooth and steady decline of the debt as a share of GDP. I suspect (but do not know) that a sensible fiscal-reform plan, adopted with bipartisan consensus, would encourage growth, calm markets, encourage investors and hiring managers, and make reducing the proportional size of the debt that much easier. But talking about growth is, I fear, a way for politicians to avoid talking about cuts – and we cannot afford to put them off. Conservative happy-talk is still happy-talk. And I would not bet the future of the republic on it: If our marker gets called in, it’s going to be a rough time making good on it.

And I still go back to the fact that we couldn’t run a household or even most businesses like this, at least not for long.  I’m sure plenty of people can argue that government is different from business or home, but is it so different that you can play by a completely separate set of rules?

Maybe this one hits home to me since I’m starting work on our annual group budget these days.  Like any business it’s full of options for massive growth tempered by realistic expectations that we’re just not going to have all the money to do what we want.  We can whine about it all day, but that’s the fact.  So we have to prioritize what we’re doing and what we want to do, and that probably means we have to make a few hard choices on where to appropriately fund for growth.

Perhaps if we had a few more business people interested in working in government — or a government more friendly to running like a business to attract that — we’d be in better shape.

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