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Has the government promised more than it can deliver?

Marketplace Staff Apr 11, 2011

Has the government promised more than it can deliver?

Marketplace Staff Apr 11, 2011

Kai Ryssdal: Here’s the downside of the budget deal that Congress and the White House reached Friday night. To be brief: we ain’t seen nothin’ yet.

Because the real fight’s still coming up, as we heard elsewhere in the broadcast today, over next year’s budget and the long-term national debt. Robert Samuelson is a columnist for Newsweek and The Washington Post. He wrote in the paper today that what we’ve got is, in fact, a federal government that’s suicidal. And that we the people are to blame.

Robert Samuelson: What I meant by that is that over the years, government has basically promised people more than it can realistically deliver. And therefore, people inevitably must be disappointed because the government has overpromised in the past.

Ryssdal: For all those problems, though, the American people, writ large, most of us get a healthy dose of benefit from the government. I mean, you quote some Census Bureau figures this morning.

Samuelson: And that is one of the reasons that we find it’s so difficult to approach and do anything about these problems. The Census Bureau estimates that roughly half the population gets some direct benefit. But if you then count some of the very large, significant tax breaks, my guess is that three-quarters or more of the American population are getting some significant benefit from the government. And therefore, although everybody’s in favor of deficit reduction and tax reform, when you actually try to do it, you run into these huge constituencies that don’t want their benefits changed. And it becomes very difficult to do anything.

Ryssdal: Seems to me it’s the very definition of ‘we have met the enemy and it is us.’

Samuelson: That’s correct. People complain about government not being terribly democratic — with a small d — but just the opposite is actually the case. Politicians are extremely responsive to their constituents, and therefore, they are inclined to give them whatever they ask for. The deficit is the kind of default position of a government and a political system that can’t really decide what’s the most important and how to create sensible priorities.

Ryssdal: As we’ve all seen the past week or so with the debate over the shutdown, you can’t talk about debt and deficit without talking about politics. And you quote James Q. Wilson, the political thinker, as saying, ‘Politics used to be about just a couple of things in this country, and now, it’s about everything.’

Samuelson: We’ve lost all sense of discipline, I think, in the ’60s and the ’70s, and we were very optimistic about economic growth. We felt the economy would grow rapidly forever and we felt we could finance almost anything. And therefore, we enacted an enormous number of new programs to do almost everything that we thought needed to be done. And now we are the unfortunate heirs of that legacy, but we’re still laboring, it seems to me, under the illusion that we can afford everything. Now the deficits have reached a huge proportion, mainly because of the really terrible recession that we had. But more importantly are the aging of the population, and the combination of the numbers of those people and the fact that we have not been able to control health costs now makes the deficits go up enormously and they are now, to a large extent, intractable.

Ryssdal: If though, the debt and deficit levels that we have reached are intractable, as you say, now what do we do? Where do we go?

Samuelson: Well let me just start by saying I hope that I’m wrong. My wife would say that I’m wrong all the time, and this may be another instance. It is possible that this bit of fear that we had over the last two weeks about the government shutdown, in an optimistic reading, might be the opening chapter of an attempt by the political system to really hammer out some sort of significant changes in our budget priorities so that we begin to bring our long-term spending commitments and our willingness to be taxed back into balance.

Ryssdal: Robert Samuelson is a columnist for Newsweek and The Washington Post. His most recent book is called, “The Great Inflation and Its Aftermath: The Past and Future of American Affluence.” Mr. Samuelson, thanks very much for your time.

Samuelson: Thank you Kai.

Ryssdal: One more budgeting note before we move on. The Pentagon said today the bill for first 17 days of the Libyan no-fly zone — that’d be through April 4th — came to $608 million. That’s just marginal costs, by the way. Extra expenses beyond normal operations and regular salaries — stuff that would have had to be paid anyway.

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