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Samuelson and Dionne: The Politics of Denial

Samuelson and Dionne: The Politics of Denial

The status quo cannot hold. The country must move past denial and grapple with a crisis that should have been addressed long ago.

The Washington Post carried two op-ed pieces last week that framed in a curious way the nature of the presidential campaign that has been gaining intensity in recent weeks and will continue to do so through most of 2012. One was by E.J. Dionne Jr., one of the paper’s mainstay liberal columnists. Its title: “Obama: The conservative in 2012.” The other, entitled “A country in denial about its fiscal future,” was produced by the well-known economics writer and regular Post columnist Robert J. Samuelson.

Samuelson paints a stark picture of the economic cataclysm facing America and of the inability or unwillingness of the political establishment to deal with it. The country, he suggests, is approaching one of those rare inflection points that completely alter the direction of the nation and the terms of its governance. And, if the country’s political class continues to ignore this reality, the current era could be “abruptly ended by a severe economic or financial crisis that wrenches control from elected leaders.”

The problem is the country’s growing mountain of debt, the legacy of more than sixty years of “giveaway politics”—the inexorable trend of politicians distributing more and more benefits to more and more people without expanding tax collections. This remarkable historical period, rare in human history, was possible, first, because of powerful economic growth after World War II and, later, by declining military spending in the post-Cold War period.

Samuelson points out that in 2010, federal spending for “payments to individuals” (Social Security, food stamps, Medicare and the like) soared to 66 percent of the budget from just 26 percent in 1960. Yet the tax burden increased hardly at all in comparison—to 18.5 percent of GDP in 2007 from 17.8 percent in 1960. Meanwhile, however, the share of the federal budget dedicated to military spending dropped to 20 percent today from 52 percent in 1960.

Taken together, this dynamic allowed the government to boost payments to individuals extensively while employing relatively modest budget deficits to bridge the gap between expanding giveaway policies and the intake of taxation. “But now,” writes Samuelson, “this favorable arithmetic has collapsed” under the weight of some major national challenges, notably slower economic growth, an aging population with big claims on federal payment programs and exploding health-care costs (now approaching 26 percent of federal spending and climbing).

“The trouble,” writes Samuelson, “is that, while the economics of giveaway policies have changed, the politics haven’t.” Both Democrats and Republicans refuse to look squarely into this looming crisis, clinging as they do to ongoing spending programs (Democrats) and low taxation (Republicans). But ultimately the giveaway ethos will have to give way to a takeaway outlook; otherwise the country is headed to a reckoning akin to past crises that redefined the nation and set it upon new directions. “Political leaders,” writes Samuelson, “assume that financial markets won’t ever choke on U.S. debt and force higher interest rates, stiff spending cuts and tax increases.” That is a very bad bet.

In other words, the fundamental underpinning of the American political system of the past sixty years is in progressive deterioration. The status quo can’t hold. A new brand of politics will have to emerge for a new era.

E.J. Dionne doesn’t buy that. His op-ed, placed on the page directly above Samuelson’s piece, is a stiff defense of the status quo—and a powerful attack on Republicans who don’t like President Obama’s redistributionist outlook. He quotes GOP presidential aspirant and former Massachusetts governor Mitt Romney as suggesting that Obama wants government to foster “equal outcomes” in an “entitlement society” in which those who produce increasingly see their earned gains redistributed to others. “And the only people who truly enjoy any real reward,” declared Romney, “are those who do the redistributing—the government.”

This reflects, says Dionne, a Republican view that “any redistribution (and Social Security, Medicare, student loans, veterans benefits and food stamps are all redistributive) is but a step down the road to some radically egalitarian dystopia.” Thus, says Dionne, Obama is the only true conservative in the race. “He is the candidate defending the modestly redistributive and regulatory government the country has relied on since the New Deal.”

 

What we see here is a fundamental difference in outlook between these two commentators. Dionne hails Obama as a protector of a status quo that is an integral part of America as we have known it since the New Deal and which will—and must—remain an integral part of our societal framework. Samuelson sees that status quo as philosophically bankrupt—and pushing America into financial ruin. It can’t hold and must be replaced with a new approach designed to avert the kind of crisis that Dionne seems not to view with any particular alarm.

Indeed, Dionne frames the issue in conventional Democratic terms, with Obama “defending a tradition that sees government as an essential actor in the nation’s economy, a guarantor of fair rules of competition, a countervailing force against excessive private power, a check on the inequalities that capitalism can produce and an instrument that can open opportunity for those born without great advantages.” The Republicans, meanwhile (in Dionne’s view), “cast the federal government as an oppressive force, a drag on the economy and an enemy of private initiative.”

 

This is precisely how Democrats have been framing American political choices for years. It hasn’t been a particularly successful political idiom since the days of Lyndon Johnson. The American people have been generally uncomfortable with the growing governmental role in the country’s economic and business affairs, and yet—as Samuelson points out—the government’s “giveaway” policies have been on an inexorably upward trajectory.

The trajectory can’t continue, as Samuelson makes clear. Either America’s political class will grab the nettle and take on the ominous financial situation facing the country or that financial situation will unleash civic forces that will crush today’s political class in favor of a rising new force of political energy. Then the traditional Democratic framework of commentators such as E.J. Dionne won’t count for much as the country moves past denial and grapples with the crisis that should have been addressed long before.

Robert W. Merry is editor of The National Interest and the author of books on American history and foreign policy.

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