I liked this Mark Thoma piece about the shifting of the Overton Window. I think I alluded to this with my story on a new round of tax cuts being humped by the GOP, and the new bipartisan consensus on the virtue of tax cuts as a stimulus measure. I know exactly what the Administration would say, they’re trying to get things done, and a payroll tax cut mimics a wage increase. And on the merits, that’s fine. But the point I made earlier is that it’s the ideological drift that you get when you fight on the other side’s turf that becomes the problem. This is what Thoma gets at in his piece:
For example, consider the current discussion over the president’s proposed budget, a budget that is touted as “broadly consistent with the bipartisan deficit reduction proposals put forward by the Bowles-Simpson Commission.”
I thought the recommendations for balancing the budget that came out of the Bowles-Simpson committee gave far too much to the GOP – the solutions that were proposed were much further to the right of the political spectrum than I would have preferred. My recollection is that people such as Paul Krugman and Dean Baker were critical as well (and recall that there was no official report because four Democrats and three Republicans on the seventeen member committee could not agree to the recommendations on the table — instead we got an unofficial report from the committee chairs, Bowles and Simpson).
However, Republicans have shifted the debate so far to the right that Bowles-Simpson is now being portrayed by the administration and others as a model of balance, reason, and compromise that both sides ought to embrace.
Thoma adds that Tim Geithner actually backed off of one aspect of Bowles-Simpson, the Social Security changes, because they were, in Geithner’s words, too tilted on the side of benefit cuts. But the problem lies in making Bowles-Simpson as the wise middle ground in the debate. When the President reached out to John Boehner with a deficit plan that was actually to the right of Bowles-Simpson, again playing on the opposing turf, then it was foreordained that Bowles-Simpson would become the moderate compromise, even though it couldn’t even get a vote on its own committee.
Thoma links to a Treasury Department blog that makes almost exactly the point I’ve been making – the President’s budget doesn’t shy away from the long-sought goal of deficit reduction, and at the same level as before. It changes some of the ratios of how the deficit reduction gets achieved, but by and large the same goals are in the foreground.
The Budget released by the President this week uses a balanced approach to achieve more than $4 trillion in deficit reduction over the next 10 years. This level of savings and the manner in which they are accomplished are broadly consistent with the bipartisan deficit reduction proposals put forward by the Bowles-Simpson Commission and the Senate’s bipartisan “Gang of Six.” Using this balanced approach, the President’s Budget reduces deficits from about 9 percent of GDP in 2011 to below 3 percent by 2018, and stabilizes the debt as a share of the economy by the middle of the decade.
In general, there is little disagreement on the magnitude of savings that are needed over the next decade to put us on a sustainable fiscal course. Rather, the main difference between the President and Republicans are related to the composition of these savings.
There’s actually substantial disagreement over the magnitude of savings. There’s an entire school of economics, known as Modern Monetary Theory, which would disagree on that broad point. But they have been largely written out of the discussion (though I’m glad to see MMT written up in the Washington Post this weekend).
So both sides play a role in shifting the Overton Window to the right. And the result is a set of policy choices that get artificially narrowed. Thoma says that the President has managed to “stop the rightward drift in the center of the conversation” and that we need someone to start shifting it back. He questions whether the President is up to that task ideologically, i.e. whether he even wants to engage on those terms. I don’t even think this is much of a question at this point.