In his latest post titled “The President’s budget: whistling past the graveyard”, Keith Hennessey criticizes President Obama’s Budget of the United States Government, Fiscal Year 2012 with some bullet points of his “overall qualitative and strategic impressions”. I share his concerns with one minor quibble.
Mr. Hennessey writes:
- … With his State of the Union address and this budget, President Obama is trying to define a new problem to be solved. He thinks … our government isn’t spending enough on infrastructure, innovation, and education. Suppose you think he’s right (I don’t). Is this problem more urgent than restoring short-term economic growth? Is it more important than addressing unsustainable deficits and a federal government expansion that will leave fewer resources for the private sector? The President apparently thinks it is. I strongly disagree.
Mr. Hennessey gives no credit for the benefits that could accrue from proper spending on infrastructure and education. There is potential for this type of spending to raise our current and longer-run GDP and thus tax revenue to offset some of the deficit that needs to be addressed. I’m in no position to provide any sort of estimate on the potential returns from proper infrastructure and education spending. However, the budget’s focus on investments in infrastructure and education are reasonable. It just doesn’t constitute a complete solution to the short-run aggregate demand slump nor the long-run deficits our economy is facing.
Mr. Hennessey does provide a hypothesis for why a complete solution was not proposed:
The President is choosing both a policy path and a campaign strategy. He is betting that having no proposal to address the looming fiscal crisis is better for his reelection prospects than having one.
The President has made his strategic choice: we are headed toward a two year fiscal stalemate in a newly balanced Washington.
If true (and I think it quite likely is), I find this approach deplorable. The President’s duty is to serve his country and defend and uphold the constitution. Our current President seems to be choosing to defend his power and serve his own interests first. Much like every other politician I can think of at the moment.
