Opinion

Nicholas Wapshott

The high cost of hating government

Nicholas Wapshott
Jan 2, 2013 16:26 UTC

The tourniquet applied by the outgoing Congress to the economy allows a two-month breather before we are consumed by the next deadline. The president and his party can allow themselves a brief moment of celebration for imposing higher taxes on the richest Americans, but the next stage in fixing the nation’s fiscal problems may not be as easy. By the end of February, lawmakers must find enough cuts in public spending to allow the debt ceiling to be raised. Two more months of uncertainty will prevent businesses and consumers from making spending decisions that would bolster the economic recovery.

The devil is not so much in the detail of the arguments to come as the big picture that frames the debilitating running debate. While the difference between the sides is ostensibly over taxes and public spending and borrowing, the more profound division is over where government should begin and end. For many of the Republican Party’s Tea Party insurgents, the choice is even more fundamental: whether there should be a government at all. Their unbending position, demanding an ever-diminishing role for the federal government, has levied an enormous unnecessary cost on everyone else.

Since Republicans regained control of the House in the 2010 mid-terms, when the Tea Party tide was in full force, they have attempted to freeze the size of government, coincidentally putting a brake on economic recovery. They have vetoed attempts at further economic stimulus, encouraged America’s economy to be downgraded by the ratings agencies by threatening not to extend the debt ceiling, and tried to veto any and every tax increase in the fiscal cliff talks. Their aim is to shrink government by starving it of funds. Such uncompromising absolutism has led to the dampening of business confidence and investment that would have created jobs.

It is not just the economy that has suffered from the absolute positions held by the anti-government rump in the GOP. Their insistence that the Founding Fathers intended us to be allowed to carry guns of any sort, including the rapid-fire assault weapon that killed 20 children and six adults in Newtown, Connecticut, last month, continues to hamper attempts to curb the nation’s murderous gun violence. Ghosts from the eighteenth century are preying on our school-children, abetted by those who believe that compromise on amending our gun laws is surrendering to the forces of big government. Such unbending absolutism costs human lives.

Similarly, suspicion of government is behind the growth in home schooling, that narrows the education of children, deprives them of a sense of community, and diminishes their social skills. It came as little surprise to read reports that the Newtown shooter was kept home from school by his mother, a “survivalist” or “Doomsday Prepper”, who stockpiled food and guns because she expected an imminent economic apocalypse. Such paranoia about the role of government is a recurring theme in our society’s most appalling massacres, from the bombing of the Federal Government Building in Oklahoma City in 1995 by the anti-government militiaman Timothy McVeigh, who killed 168, including 19 children, to the FBI siege of the anti-government Branch Davidian sect in Waco, Texas, in 1993, that left 76 dead.

Here’s the path around the fiscal cliff

Nicholas Wapshott
Dec 3, 2012 18:40 UTC

The “fiscal cliff” talks offer a chance to rebalance the American economy so that the long years of living beyond our means — spending too much and raising too little, paid for by borrowing from the Chinese – will be brought to an end in an orderly fashion. As we have seen from the pitched battle between the White House and the Republican House leadership, finding the right balance between tax increases and spending cuts is not easy.

The guiding principle for both sides, however, should be primum nil nocere: First, do no harm. Having survived the worst financial crash in 80 years, the United States should do nothing to put the fragile recovery at risk. Since the turmoil of 2008, economic growth remains positive but feeble, which is more than you can say for comparable economies, such as the eurozone and Britain, that have battened down the hatches and nosedived into slump. The 17 eurozone countries are deep in recession with joblessness at more than 11 per cent; last quarter the U.K. briefly emerged from a double-dip recession of its own making but is expected to enter a triple-dip recession by the end of the year.

If we get the fiscal cliff bargain wrong–too-large tax increases combined with too-deep, too-early cuts in public spending–we risk tipping the economy back into the painful recession we have just escaped. In Washington, the trade-ff between tax and spending is portrayed as a quid pro quo, with Democrats demanding tax cuts for everyone except high earners and Republicans pressing for deep cuts in Medicare but not defense. The politicians have badly framed the argument. Think of tax and spending — if you will excuse the battered simile — as the knobs on an Etch-A-Sketch. To draw a perfect circle entails turning both knobs together at exactly the right rate.

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