No compromise

In his blog Paul Krugman makes the point that the stimulus bill before Congress isn’t going to end up with bipartisan support.  The GOP wants tax cuts and the Democrats want spending.  The difference of opinion isn’t so much a debate over the proper course of action, it’s a “collision of fundamentally incompatible world views”.  Says Krugman:

If one thing is clear from the stimulus debate, it’s that the two parties have utterly different economic doctrines. Democrats believe in something more or less like standard textbook macroeconomics; Republicans believe in a doctrine under which tax cuts are the universal elixir, and government spending is almost always bad.

Republicans certainly like tax cuts, but I think it’s important to be clear why. It’s not because they think tax cuts will pay for themselves (even though they say so); it’s not because they don’t like the government to spend money (see Iraq War, et al); it’s not because they are particularly greedy (well, maybe it is, but let’s just stipulate that one).  It’s because the massive borrowing required by tax cuts will eventually accomplish what they can’t accomplish through more straightforward means:  destroy broad based social insurance programs like Social Security and Medicare.  This is the “fundamentally incompatible world view”.  For the modern conservative Social Security and Medicare are “European-style socialism”.  And if Obama tries to pass anything approaching national healthcare, he’s going to have a major collision with that world view.


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Filed under economics, healthcare finance, social insurance

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