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July 14, 2005

Unsolicited policy advice for the Democrats

Michael Mandel

Democratic pollster Ruy Teixeira considers how the Democrats could use new ideas about the economy. He writes:

1. Those ideas should sum up clearly and simply what the party stands for and where it proposes to take the country.

2. Those ideas should be few in number and easily reduced to a key principle or two that can be transmitted to voters--otherwise voters are unlikely to pay much attention.

3. Those ideas should actually work in practice, so that voters will see the benefits of having the party in office and reward it with additional electoral success.

I fail to see how "cutting the budget deficit" fits any of these criteria.

Do the Democrats really want to sell themselves as the party of fiscal rectitude and hairshirt economics?

Do the Democrats really want to sell themselves as the party of "we will raise your taxes and cut your benefits?"

And most important, the only real economic effect of a smaller budget deficit is to induce a bit more capital spending...maybe. Most economic models show that cutting the budget deficit actually depresses consumption for years. Do the Democrats really want to sell themselves as the party of "more business investment and a lower standard of living?"

Is there something here that I'm not getting?

12:45 PM

Political Economy

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Posted by: Norman Mandel at July 15, 2005 12:07 PM

After the last election, news reports said that "morals" were the main point in choosing one candidate over another. Hence, I'm not sure the public is interested in fiscal or monetary policies.

I'm an advocate of balanced budgets except in the time of national emergency or economic disaster (recession/depression). You state that "Most economic models show that cutting the budget deficit actually depresses consumption for years." Could this be related to the fact that there has only been a couple years in the past 20 where we have had a budget surplus? (it's no coincidence that the economy was strongest in those years as well)

Posted by: Wes at July 18, 2005 03:55 PM

Deficit spending can benefit everyone, IF that money goes to multiple sources other than wars with no end in sight (and Halliburton)--ex: see R. Reagan. Check out www.nationbrandsindex.com to see what our out of control spending on neo-con goose chases is getting us--a falling 'image'. We can use the "We're the U.S., we could care less" card only for so long. The government can keep spending, as long as it doesn't take down our global businesses (or more importantly their well crafted images). Dems lost because of some weird confluence of social, religious, and patriotic themes, not their economic views.

Posted by: HBoyes at July 19, 2005 05:47 PM


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