All budget busters are welcome

Two years ago it seemed extreme when Bernie Sanders proposed free state college tuition for everyone. He guessed it would cost $75bn and most people wrote it off as the loose talk of a socialist. It was just Bernie being Bernie.

Last year the Repubs passed a corporate tax cut that has created $1trn budget deficits as far as the eye can see and that assumes solid growth. If we get any weakness in GDP (tax revenue) then this will really get interesting. No one seems to pay attention to these figures and they talk as though the better growth figures came out of the blue. There is no cost. Apparently budget deficits have fallen completely off the radar. Bernie’s tuition plan suddenlt seems cheap.

The new trove of Democratic Presidential candidates has taken note. Many now support Medicare for all and some have endorsed the “Green New Deal”. Everyone supports free community college and most accept free state college as a given. This has led to the accusation that the Democratic party has lurched to the left (which isn’t the same as becoming socialists). They have and so have the budget busting Republicans.

Somehow we reached a point where providing free services to the people is leftist or socialist whereas cutting corporate taxes is noble or at least a beautiful free market gesture. Please let’s eliminate the word socialist from the conversation – they believe that the government should own certain industries or at least companies in key industries – like a national phone or oil company. So far I haven’t heard any Democrat advocating for a government takeover of any industry. Bernie wants to offer cheaper or free services to the middle class; Elizabeth Warren wants to increase government oversight.

It is now true to say that the Republican tax cuts have pushed the Dems away from fiscal rectitude. So-called moderates look for ways to pay for some of these goodies which makes their pitch decidedly less attractive than a Republican platform with no budget concerns at all. Progressives have no qualms about budget deficits since Paul Krugman told them not to worry. How can moderates win?

We have entered a race to outspend or out-cut taxes. Keynes is rolling over in his grave. What’s the difference between $1trn and $1.5trn? Will millenials ever wake up to the fact that the bill is coming to them? Alexandria Ocasio-Cortez is a millennial but no one seems to have ever explained government finance to her.

Someone should set up a meeting between Alexandria and David Stockman.

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