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Party Like It's 1995!

Obama wants to avoid the pressing issue of government spending.

1:31 PM, Jan 28, 2011 • By JAY COST
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Some of the commentary I have read from the left on President Obama's State of the Union address seems to praise it in the same way that Ed Kilgore of the New Republic does:

A crash program for economic competitiveness? We’ve heard it dozens of times, and Obama’s speech mainly substituted new global rivals for old ones. Harrumphing about how education and a skilled workforce are they key to national prosperity? Obviously an old theme. Reorganizing major federal departments was one of Jimmy Carter’s signature initiatives. Tax simplification was one of Ronald Reagan’s. Making government a lean, mean efficiency machine has been promised many times, most notably by Bill Clinton. Across-the-board spending freezes, support for small business entrepreneurs, growing green jobs, better infrastructure, boosting exports (without, presumably, those pesky imports)—we’ve heard it all. One conceit—the “Sputnik Moment”—was so old that you wonder if the president’s young speechwriters just found out about it.

And that’s the beauty of Obama’s address. He basically put together every modest, centrist, reasonable-sounding idea for public investment aimed at job creation and economic growth that anyone has ever uttered; and he did so at the exact moment that the GOP has abandoned the very concept of public investment altogether. He’s thrown into relief the fact that Republicans no longer seem interested in any government efforts to boost the economy, except where they offer an excuse to reduce the size and power of government.

I'm not really sure how we square the payroll tax holiday with the claim that the GOP opposes "any government efforts to boost the economy," except to say that Kilgore is exaggerating. If we filter out the hyperbole, I think we can drill Kilgore's argument down to this claim: while Obama's boring speech put people to sleep, it gave them pleasant dreams about how the president is closer to their opinions than those crazy Tea Partiers. I also think that this was the White House's view, although they probably didn't think the address was boring! 

What this line of thinking fails to account for is the change in the budgetary environment that has transformed run of the mill conservatives from Bush supporters in 2004, who defended No Child Left Behind against the criticisms of their liberal friends and neighbors, into Tea Partiers. Fortunately, the CBO put out a nice graph yesterday that gets the job done:

Federal spending as a share of GDP averaged, between 1971 and 2008, 20.6 percent of GDP. In the last two years it has averaged 24.4 percent, and for the next decade it is set to be 23.5 percent. Additionally, the deficit as a share of GDP averaged 2.6 percent from 1971 to 2008. In the last two years it has averaged 9.45 percent, and for the next 10 years CBO expects it to average 3.6 percent. 

If this were 1995, I'd probably agree with Kilgore's analysis that Barack Obama in this week's State of the Union found the dull, boring center of public opinion, where talk about school uniforms, V-chips and investment in science and technology appeals to the middle class women who swing elections. But this is not 1995. It's 2011, and we are facing a decade of unprecedented government spending and frightening deficits, which sooner or later will require significant changes in the relationship between the people and the government. In 2011, Obama's offering -- a five-year spending freeze at already elevated levels, scores of new spending proposals, and no serious plan to deal with the deficit -- does not strike me as being centrist.

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