Suppose you had a friend who was grossly overweight for years but lately had been looking very trim. Suddenly, though, he puts on 30 or 40 pounds and is waddling around like his old porcine self. He explains that he's found a marvelous new diet: "You eat like a pig and stop exercising until you get so fat that you just have to lose weight." Would you say that your friend is kidding himself?
And if your friend went on to complain that he was getting fat because other people were eating too much, and this diet was the only way to stop these other people from putting those unsightly pounds on him, would you think his self-delusion was becoming clinical? Or would you start to suspect that the joke is on you?
Yet this is essentially the logic adopted by the Bush administration and the Republican congressional leadership to rationalize turning the federal budget surplus back into huge deficits. They say that deficits are actually a good thing—despite what you may have heard from Ronald Reagan and almost every Republican before and since—because deficits create pressure for smaller government. "Conservatives Now See Deficits as a Tool to Fight Spending" was the headline on a recent New York Times article quoting a slew of them—including the chairman of Bush's Council of Economic Advisers, Glenn Hubbard.
This line of patter started a couple of years ago, when Bush inherited a budget in surplus. There is some sense in the idea that a surplus stimulates appetites and that prudence suggests giving the money back before it gets spent. But "giving back" money you don't have turns prudence on its head.
Back in the 1980s, liberals used to suspect that Reagan was up to something similar—purposely producing a deficit to discredit the government—and would leap with a great "aha" on any Reaganite remark half-implying as much. Today, what used to be the ulterior motive has become the public excuse. The Bushies apparently would rather be thought of as insanely Machiavellian than as shamefully irresponsible.
In case the chief White House economist, the House majority leader (Tom DeLay), and others actually believe in this magical fairy dust, we'd better explain patiently why it is unlikely to succeed. You see, boys and girls, the trouble with spending is that it costs money. If the government could spend money it doesn't have without running up debts that have to be paid back (with interest), there would be little reason to object. So running up those debts in order to reduce spending is a bit self-defeating.
The psychological trick may not work at all: Does abandoning self-discipline and convincing yourself that it's OK lead to more self-discipline or less? Does handing out tax cuts without equivalent spending cuts make people think, "We've got to stop doing this"? Or, "Hey, this is nice"? But let's suppose that the trick does work: that every extra dollar of deficit creates extra pressure to do something about the deficit. There are still a couple of problems. First, that "something" can be either cutting expenses or raising revenues, and there is no logical reason why deficits should create more pressure for one than for the other. Although Republicans insist that bigger deficits will lead to smaller government, it would be equally plausible to argue that they will lead to higher taxes.
Second, if every dollar of increased deficit represents a certain amount of extra pressure for fiscal responsibility, what happens when that pressure brings the deficit back down to where it was before you started monkeying around? Presumably at that point the beneficial pressure is also the same as it was before. Except that your round trip to the wilder shores of fiscal irresponsibility has added the interest on a few trillion dollars of increased national debt to the annual cost of keeping the government in the style to which it has become accustomed.
The only way this notion of running up huge deficits makes sense as a purposeful strategy is to think of it as a Lenin-style "heightening the contradictions." That is, make things worse until there is a crisis in which you can triumph when the smoke clears. Or, to make the same point with a different metaphor, perhaps the idea is that government spending is an addiction, and the patient has to hit rock bottom before an intervention can start him on the path to a cure.
But who is the patient? Who is this government that is so out of control? Republicans now control the White House and both houses of Congress. Even the Supreme Court has made vividly clear that it stands ready to help if necessary. And self-labeled conservatives are pretty much in control in the party itself. There is nothing to stop President Bush and his congressional cohorts from proposing, enacting, and imposing any vision they may have about the proper size of government and method of financing it. They don't need wacky behavioral schemes and incentives.
The administration's 2004 budget documents include long-run projections, based on its own policy wish list and its own economic assumptions, that show growing deficits from now until … forever. If Bush really believes that increasing deficits in general, and its own policies in particular, will produce smaller government and more fiscal responsibility, why don't his own numbers reflect this? In the fine print, it seems, the Bush folks don't really believe any such thing. And why should they? It's ridiculous.