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Last Week's Hearst-New York Times Column

(Writer's note: By agreement with the syndicators, these columns appear here a week after their newspaper release)

^(For use by New York Times News Service clients)@<
^C.2011 Hearst Newspapers@=
WASHINGTON _February 9, 2011.
Feb. 14th is not just a day for romantics, but this year it's a big day for political science and economics wonks every where.

Feb. 14th is, after all, when President Obama will release his administration’s budget proposal for the next fiscal year. It sounds like it will not be the Valentine’s Day massacre of government programs that his Republican adversaries are demanding.

He's calling it ``a responsible 10-year path for reining in the deficit.’’ Those on the right are demanding something that gets the job done in say, one year. Tops.

All this is a tad strange when you consider Congress couldn’t get fiscal and pass this year's budget blueprint because, as Maya McGuineas, president of the Committee for a Responsible Federal Budget, lamented, ``No one wants to spell out what they would do, given that the choices are humongous deficits or tough policy choices.’’

Everyone is as far apart as ever. Each side believes it is aligned with the angels against the devils.

Pick your poison: Liberals argue that more government spending will mean more government revenue because social programs will turn those in need into taxpayers. They describe that spending as an ``investment.’’

As for stirring up calcified government bureaucracies, that is obviously a right-wing plot to demonize public service. Instead, their watchword now is ``Jobs, Jobs, Jobs.’’


A new radio ad by the Democratic Congressional Campaign Committee is already playing in the districts of House Republicans they view as vulnerable in the 2012 elections. It attacks the huge cuts in education and science proposed by GOP hardliners and lectures that ``research and development is how we get the new products that create new jobs.’’

Conservatives are just as dogmatic. They insist that lower taxes will actually add to the public coffers. They take their inspiration from Arthur Laffer and his ``Laffer Curve’’ argument that tax cuts rev up commerce and ``a faster-growing economy means lower unemployment and higher incomes _ meaning more taxes paid by the wealthy _ and reduced unemployment benefits and other social welfare programs.’’

Laffer has been a favorite of conservatives, at least since he was a part of the Reagan administration. He's a champion of so called ``Supply Side Economics’’ that has certainly supplied Republicans with a rationale to slash taxes.

So they insist on radical cuts to their hated federal domestic programs. Forget about tax hikes, of course, even if it means blowing off $700 billion over 10 years. It wouldn't be Laffer.

When the time comes to inflame their faithful, the choirs turn to their very own preachers in the opinion media and shut out anybody from the other side. In fact, they demonize them, too.

It's entirely possible that some of this thundering is the storm before the calm, that each side is staking out bargaining positions. In that scenario, the game of chicken will play out and cooler heads will reach a compromise in the nick of time, which, in this case, is when the debt ceiling tops out sometime this year and requires congressional action to raise it.

That could be as early as the end of March. If the ceiling isn't raised in time and the U.S. government is forced to default on its massive debt, we can kiss our way of life goodbye.

The next lurch in this process, though, comes with the release of the administration’s proposed budget on Feb. 14th. It promises to be anything but a love fest. The trick will be to rein in the passions that could tear the heart right out of our economy.
(E-mail: bob(at)hearstdc.com; on the Web: www.bobfranken)


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