Dog-and-pony show

Since Valentine’s Day was Sunday, I’m guessing everyone has had a recent experience of trying to make themselves seem more impressive than they actually are.

We all do things for the sake of creating a desired impression at times.

Unfortunately, when Barack Obama does it with regard to the budget, harmless coquetry becomes a political maneuver to gain some brownie points with voters.

When the president released his fiscal year 2011 budget to Congress on Feb. 1, it included a temporary freeze in nondefense discretionary spending. While the military and entitlements are untouchable, the proposed budget will slash funding for things such as air traffic control, education and national parks.

How much will this painful “tightening of the belt” reduce the deficit? The estimated $250 billion in savings over 10 years would actually be less than 3 percent.

It’s a move to create an impression for the public, which has recently become enthralled with panicking over government spending and the fiscal deficit. This is despite the fact that, according to the projections, a decade from now interest payments on the deficit will have risen to 3.5 percent of GDP.

Not to mention that “the eye-popping $1.56 trillion deficit for the current fiscal year ... to be followed by a further $1.27 trillion in fiscal 2011 ... ought mostly to be seen as a consequence of the downturn that Mr. Obama inherited,” according to The Economist.

The United States is lacking in its amount of “automatic stabilizers.” These are things like unemployment benefits and welfare that act as a negative feedback loop on GDP and kick in during times of recession to help boost demand. Compared to other rich nations, the federal government has to step up spending to stave off a deeper economic downturn.

But Obama has suddenly felt he needs to pander to “politicians who voted for budget-busting tax cuts posing as apostles of fiscal rectitude, politicians demonizing attempts to rein in Medicare costs one day (death panels!), then denouncing excessive government spending the next,” in the words of New York Times columnist Paul Krugman.

It appears that Obama has prescribed to the philosophy of H.L. Mencken: “No one in this world has ever lost money by underestimating the intelligence of the great masses of the plain people. Nor has anyone ever lost public office thereby.”

Obama’s proposed spending freeze is contributing to the illusion that our deficits are harming us in the short run. He should be focused on what would truly help the budget — reducing entitlement payments through things like heath-care reform — rather than trying to impress “fiscal conservatives” with dog-and-pony show spending freezes.


E-mail: akames@indiana.edu