The Economist’s Will Wilkinson on Bruce Bartlett and “Good Spending, Bad Spending:”
Rather than arguing dogmatically for a higher or lower level of total spending, it would be nice if we could focus a little and argue for and against the value of different kinds of spending, and then to focus a little more on the value of different ways of spending within budget categories.
Some government spending gives folks stuff they want. Some government spending is worse than stealing money, throwing it in a hole and burning it. This is obvious when you think about it for a second, but it sometimes seems that partisan political discourse is based on the refusal to think about it at all.
Conservatives with a libertarian edge often proceed as if government spending as such is an evil to resist, except when they’re defending a free-lunch tax cut (we’ll have more money to wrongly spend!) or the ongoing development of experimental underwater battle helicopters. And liberals with a social-democratic streak often operate within a framework of crypto-Keynesian mysticism according to which handing a dollar to government is like handing a fish to Jesus Christ, the ultimate multiplier of free lunches.
My take:
- It’s sad testament to the current debate that it has to be explicitly said that the composition of spending matters at least as much the overall level of spending and taxation. At least Wilkinson says it well.
- When you put it in terms of “experimental underwater battle helicopters,” I become a bit more sympathetic to defense spending.
- The dig at Keynesianism is weird, though funny! I suppose there are liberals who come awfully close to endorsing the broken window fallacy and hold to magical thinking when it comes to the multiplier effect of government spending, but the mainstream view is that hard Keynesianism requires a lot of discipline during good economic times.
- What usually goes missing from analysis about the composition of spending is the difference between weak claims and weak claimants. The ideal scenario is one in which self-styled deficit hawks become the sworn enemies of farm subsidies and the mortgage interest deduction, while keeping money in community health centers, Medicaid, and the Earned Income Tax Credit. But nothing in the last few months has indicated anything about this sort of alignment. Instead, you have Paul Ryan going after Big Poor, not because those low income people have weak claims on the public purse - they have the strongest claims - but because they’re weak claimants with limited political power. Any discussion about the composition of spending has to deal with this reality.
