Subject: Flaws in GOP’s pledge to balance budget - Ed Luce _ FT
From: "Michael Andrews" <[email-masked]>
To: "Hunter Biden" <[email-masked]>, "Eric Schwerin" <[email-masked]>
Date: Wed, 29 Sep 2010 15:58:02 -0400

Flaws in GOP’s pledge to balance budget
By Edward Luce
Published: September 29 2010 18:41 | Last updated: September 29 2010  
18:41
In the build-up to the UK election in May, David Cameron’s  
Conservative party made little bones about the fact that Britain was  
heading into an “age of austerity”. In his “contract with voters” that  
Mr Cameron issued before polling day, he observed: “We know how  
unhappy you are and how doubtful you are that anyone will achieve  
anything or change anything.”

The contrast with the Pledge to America the Republicans issued last  
week as the basis for their midterm election campaign could not be  
sharper. One party offered the 21st century equivalent of “blood,  
sweat and tears” – admittedly watered down as polling day approached.  
The other parodied Pangloss’s hope that “all will be for the best in  
the best of all possible worlds”.

EDITOR’S CHOICE
In depth: US midterm elections- Sep-15

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Obama strives to regain spirit of ’08 - Sep-27

US parties toughen up before poll - Sep-24

Congress backs away from vote on taxes - Sep-24

Republicans vow to repeal healthcare law - Sep-24

Nowhere in the Republican pledge was there acknowledgement of the  
painful decisions that all Americans must confront to avert disaster.  
Nor was there even a hint of admission that Republicans bore at least  
equal responsibility for the low regard in which all politicians are  
held in America, as they are in Britain. Instead of medicine, there  
was sugar.

This is how the pledge begins: “With this document, we pledge to  
dedicate ourselves to the task of reconnecting our highest aspirations  
to the permanent truths of our founding by keeping faith with the  
values our nation was founded on, the principles we stand for, and the  
priorities of our people.”

Such was the mood music. But the real contrast was in the substance.  
Although Mr Cameron’s Conservatives fudged the extent of spending cuts  
as the election approached, they stuck firmly to the line that there  
could be no tax cuts if Britain were to restore its budget to balance.

In contrast, John Boehner, the Republican leader in the House of  
Representatives, flanked by the “Young Guns”, only one of whom is  
younger than Mr Cameron, promised to maintain all the tax cuts that  
George W. Bush instituted, never raise any taxes again in any shape or  
form, and do all this while restoring America’s budget to balance.

All of which might have been plausible were it to have spelt out the  
draconian spending cuts that would therefore be necessary to bring the  
budget back to surplus. But it declined to do so. Instead it ring- 
fenced more than three-quarters of the US federal budget – social  
security, Medicare and defence spending – and promised to impose caps  
on the remaining, “discretionary” portion of it.

In numerical terms, the $320bn the party has specified in spending  
cuts over the next decade is dwarfed by the $4,000bn in tax cuts that  
it promises – all on top of the current double digit budget deficit.

Simon Rosenberg of the NDN, formerly known as the New Democratic  
Network, says the idea that this would result in a budget surplus  
comes from the “Harry Potter school of economics”.

If implemented, the pledge would bring about a crisis in US sovereign  
creditworthiness. In the name of the founding fathers it would  
jeopardise the dollar. Which leads us to one of two conclusions.  
Either the Republican Party believes what it is saying, in which case  
it has no further useful intellectual contribution to make. Or else it  
thinks the US electorate is intellectually challenged and will mistake  
this fantasy for a plan.

The latter cannot be discounted. If the polls are right, the  
Republicans are on course to capture the House on November 2. At their  
head are leaders who voted for every spending measure George W. Bush  
requested, including the unfunded $600bn expansion of prescription  
drugs for seniors, which was probably the most egregious instance of  
corporate welfare in modern US history, as well as the unfunded $260bn  
highways bill that included the infamous “bridge to nowhere”.

These are the same lawmakers who inherited the largest budget surplus  
in modern US history, when Mr Bush came to office in 2001, and  
bequeathed the largest ever peacetime deficit to Barack Obama in 2009.  
Like the Bourbons, they appear to have learnt nothing and forgotten  
nothing. For the sake of America’s economic future, and everyone  
else’s, friends of the US must hope its voters have not forgotten  
their recent history.