Wednesday, May 28, 2003

Phantom Menaces

In his mathematical fantasy Flatland, Abbott imagined a 2-dimensional world whose inhabitants have a hard time understanding the mysteries of the third dimension. In its own way, our public discourse is also a Flatland; but what Americans have trouble comprehending, besides an argument more than two sentences long, is anything that takes more than a few months to take place. Our politicians are never penalized for promoting policies that will obviously harm us over the long or even the medium haul. Reagan ran up the deficit back in the ‘80s, but the consequences of his financial policies were perfectly invisible. The economic growth we missed out on as a result wasn’t anything you could see, feel, or make a headline about. Indeed, the bad consequence is the area between two curves, the increase in wealth we would have had with lower interest rates and the actual increase. Try running a political ad on the basis of that calculus problem!

Incidentally, I don’t think the more thoughtful Republicans are unaware of the predictable consequences of their economic policies. Some of them may be counting on the Rapture to zero out their MasterCards, but for many of them the advantages of a big national debt outweigh its costs. Over and beyond bankrupting and perhaps destroying the social programs the Right hates, deficit financing results in vastly better yields for bondholders. To a remarkable extent, the Republican platform is a very well thought out answer to the exam question, “How do we get people who work for a living to support those who don’t work at all?”

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