The Democrats announced that they are committing themselves to work to balance the budget. They will re introduce PAGO (Pay As You Go) which entails cutting expenditures some other place before spending more on an old or introducing a new program. They did this twice before. In each case it enabled to GOP to spend the funds saved—by recreating a deficit. There follows a personal observation on the subject, from the period that followed my service in the White House as a senior advisor.

“Shortly after Carter lost the election to Reagan and the new president was sworn in, I was surprised to receive an invitation to a White House briefing, to take place in the Old Executive Office Building. To this day, I believe it was simply an error based on some staff list the White House maintained. The briefing was conducted by Murray Weidenbaum, a professor of economics from Washington University, the incoming chairman of the White House Council of Economic Advisers.
Weidenbaum had much to say, and often did so with a keen sense of humor, but one comment stuck with me. He told the assembled group that the new administration would generate such a deficit that if the Democrats ever made it back into office, they would be unable to spend much on their favorite social programs. (Not trusting my memory, I checked with Murray, who confirmed my recollection.) The Reagan administration lived up to this promise, with a vengeance.

President Clinton had to (at least he believed he had to) abandon many of his plans in order to wipe out the Reagan deficit. He ditched his plan to Put People First, to invest great amounts of public funds in education and training, a cardinal part of his 1992 campaign. Instead, overruling liberals such as Robert Reich and Donna Shalala, siding with Robert Rubin and Alan Greenspan, Clinton gave priority to eliminating the deficit. He--and the nation--were richly rewarded. Ending the deficit was a major factor in reducing interest rates which in turn helped generate a fabulous economy in the 1990s and left, at the end of his administration, a giant surplus. But, far from it being used to fulfill Clinton’s initial commitment to invest in people, it was largely consumed by the Republican administration that followed him to provide tax cuts, mainly to the super-rich. It is quite possible that when the Democrats find their way back to 1600 Pennsylvania Avenue, Murray Weidenbaum will be on the money for a second time. Lesson for the day (or decades): Politics is a strange business that follows different rules than economic theories, doctrines of fairness, or giving dessert where it is due. Take note, those who enter these gates.”

I wrote these lines in 2002. There are included in my book My Brother’s Keeper: A Memoir and A Message (Rowman & Littlefield, 2003).

Does it make sense for the Democrats to “act responsibly” only to provide funds to be expended by the next Republican administrations on its constituencies?