More than 25 years ago, Representative Jack Kemp told me, “In the past, the left had a thesis: spending, redistribution of wealth and deficits. Republicans were the antithesis: spending is bad.”
He went on to explain, “Ronald Reagan represented a breakthrough for our party. We could talk about lower taxes and more growth. We didn’t have to spend all our time preaching austerity and spending cuts. The question now is: Do we take our thesis and move it further, or do we revert to an anti-spending party?”
President Barack Obama tried to call the Republicans’ bluff in his State of the Union Address. “Deficit reduction alone is not an economic plan,” the president said. He didn’t come out against deficit reduction. He said it should not be given a higher priority than economic growth. There are many reasons why it is important to reduce the national debt. Short-term economic growth is not one of them.
There’s little argument that the impending sequester — across-the-board government spending cuts scheduled to begin March 1 — will slow the nation’s economic growth. In fact, it’s already happening. The nation’s economy shrank in the last quarter of 2012. Economists attribute it to cutbacks in defense spending in anticipation of the sequester. More cutbacks will give us exactly what the country doesn’t need right now — austerity.