March 7, 2009
Who is the Smartest of Them All?By Christopher Chantrill
You all remember the old German folk tale of Snow White and the Seven Conservatives. Every morning the liberal policy wonk gets up and looks at The New York Times online.
And The New York Times always responds in the same way.
Sometimes our liberal friend can't get enough of these comfortable words and turns to the op-ed section.
And The New York Times columnists always respond:
Those Republican presidents! They sure can pick ‘em!
One thing you can say about the Obama Budget Overview. (By the way, you can see the headline charts at usgovernmentspending.com.) It is smart. The critical Table S-6 in the summary section is chock full of administrative smartness. Here are the smart initiatives that will tweak the health-care system into shape. The numbers are the annual savings projected by the time things really settle down in FY 2015.
All these efficiencies will add up to $40 billion a year by 2015. But the real number to look at is the limitation on itemized deductions of rich people. That's what is going to fund health-care reform from the revenue side, and it comes in at $37 billion a year by 2015.
Actually this is chump change. The real money is in the "tax cuts" to Democratic voters, a total of $94 billion a year by 2015. The biggest item is the Making Work Pay Tax Credit, at $65.1 billion a year by 2015. That's a $400 tax credit for each worker or $800 per working family, for now. It works out to about $43 billion in tax cuts a year and $22 billion in checks to people that don't pay income tax.
Don't be misled though. If you strip away the emergency spending from President Obama's budget, the scary $1.75 trillion deficit and the $3.9 trillion outlays for FY 2009, then you are left with is a new ratchet upwards in the welfare state, and all the smoke and mirrors that it takes for smart people to persuade themselves that the nation can afford it.
If you strip away all the smartness, President Obama's budget is just returning to the Clinton program of health-care nationalization. He is going to fix the leaks in the creaking health-care distribution network and hope that the increased pressure doesn't burst the pipes elsewhere.
If you strip away the smartness, President Obama's budget is merely extending the reach of government education, both in early childhood and in early adulthood. Judging from the tone of his speech last week to the Joint Session of Congress, he's planning to increase the degree of compulsion.
You can see what comes next. If the youth of America don't stop dropping out of school, firmness will be required. But given the dismal record of educational compulsion over the last century, it won't make any difference.
If you strip away the veneer of smartness President Obama's energy program is a reprise of the 1970s synfuels program. Only now the magic elixir is not synthetic fuels but renewables like solar and wind.
There's a problem with this cult of smartness. Smartness just isn't enough. There's a host of reasons why. There's Hayek's rule that the government in Washington just doesn't have the bandwidth to run health care, education, and energy. There's the fact that government can only legislate genuine reform in a government program about once in a generation, while the free market is reforming itself every day. There's the fact that government programs always end up serving producers, not consumers.
Then there is the other little problem with smartness. There comes a day when the mirror on the wall tells you the awful truth. Or maybe it gets bought out by a Mexican telephone monopolist.
We don't yet know who Snow White is, or the names of the kindly conservative dwarfs that protect her. But we know one thing. She is not just smart. She is wise.
But, Schneewittchen! (That's German for Snow White.) Don't go eating any apples, hon.