THE WRONG IDEA AT THE WRONG TIME…. At last week’s presidential debate, John McCain’s prescription for dealing with a financial crisis was painfully backwards. He vowed to slash federal spending (“with a hatchet” and with a “freeze”) and balance the biggest budget deficits in American history in just four years.
He made similar arguments on the stump after the debate, arguing the other day that the government ought to “live on a budget, just like you do.”
McCain’s approach seems to mirror the pundits’ conventional wisdom — in tough times, the government should tighten its belt and cut back on investments that might spur economic growth. The “neo-Hooverite premise” dominates much of the media discourse.
[E]xtra spending, a sore point in normal times, has been widely accepted on both sides of the political aisle as necessary to salvage the banking system and avert another Great Depression.
“Right now would not be the time to balance the budget,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a bipartisan Washington group that normally pushes the opposite message.
The Committee for a Responsible Federal Budget, of course, generally argues in support of a balanced budget, but even it realizes there are circumstances to consider here.
And yet, McCain has faced minimal resistance on this. Even the Obama campaign seems reluctant to note that McCain has his economics backwards, probably out of fear that the media’s conventional wisdom — that it’s better to cut spending and worry about debt when the economy is falling apart — is widely accepted by voters. But that doesn’t make McCain any less wrong.
The New York Times report added, “[I]f recent history repeats itself, the deficit is likely to be an issue again when the economy recovers.”
Fine. Great. No problem. I’m all for it. But until then, can we not pretend that McCain’s plan makes sense?