Posted by: Michael Mandel on July 14
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?
Michael Mandel, BW's award-winning chief economist, provides his unique perspective on the hot economic issues of the day. From globalization to the future of work to the ups and downs of the financial markets, Mandel-named 2006 economic journalist of the year by the World Leadership Forum-offers cutting edge analysis and commentary.