This interesting New York Times piece drawing parallels between current Democratic debates on economic policy and similar ones in 1993 is worth a read and it got me thinking about deficits and social policy. The general consensus about the deficit on TAPPED and other liberal blogs is that the next Democratic president should first try to establish new social programs, then think about how to pay for them, doing so with debt if necessary. The logic is unassailable. After all, under Clinton the deficit was eliminated, but the progress that was made was immediately squandered by Republicans. So if the next president is a Democrat he or she'd have to be crazy to sacrifice real progress on new social programs (universal health care being the prime example) for a balanced budget since there's no reason to believe that many Republicans have given up on the tax-cut-and-spend model of governance, and any progress on deficits would be immediately wasted. Social programs, on the other hand, are extremely hard to kill once established. I agree with all of this. A Democratic president would in fact have to be crazy to prioritize balanced budgets. The problem is though that in the long run this will create ever stronger incentives for free-riding. Each party knows the other is unlikely to be fiscally responsible and so each party has no incentives to do so itself. This, in turn, leads to ever-worsening debt until either it becomes unsustainable or the public becomes so concerned that it demands strong budget hawks as candidates from both parties. One end is somewhat disastrous, the other is unlikely because it requires both parties to simultaneously switch attitudes (if only one party does the other will continue to be irresponsible and the vicious cycle will continue). Of course it's possible this will be moot and the next Democratic president will be able to both move the budget towards balance and implement the expanded social programs we so desperately need. Still, if this isn't the case, Democrats need to realize that, while prioritizing policy over balance is the right choice right now, in the long run things may get much worse before they get better. --Sam Boyd
