Inspired by the popularity of Greg Mankiw’s Pigou Club, which favors using taxes (or auctioned permits) to address pollution problems, the Committee for a Responsible Federal Budget has created its own: the “Announcement Effect Club.”
To become a member, you need to endorse the idea that it would help the U.S. economy if our elected leaders could develop a credible plan to bring our deficits and skyrocketing debt under control. In CRFB’s phrasing:
While aggressive debt reduction in the short term might imperil the fragile recovery, the announcement of future deficit reduction can actually strengthen it.
I’m happy to be a member (based on this post last October).
The above is good to see, but an even more important “club” for folks on the right to “join” is “Club Wagner” http://economix.blogs.nytimes.com/2009/07/07/club-wagner/ and http://economix.blogs.nytimes.com/2009/07/09/more-members-of-club-wagner/
A couple of notes:
– Based on the answer Holtz-Eakin gave to that very question during an event Q & A last May, it’s clear to me that Holtz-Eakin does NOT deserve to be in the club. He was asked very directly to acknowledge that our long-term fiscal imbalance cannot be solved entirely on the spending side, and he refused, saying he just doesn’t know whether or not it’s possible because it hasn’t been tried.
– The inclusion of “club members” from the left adds nothing to the objective of affecting public opinion (since everyone assumes they believe taxes should go up as at least part of the solution). What is needed from them is acknowledgment that the solution cannot consist entirely of tax increases on “the rich”, nor of that plus Defense cuts plus healthcare “reform” that does not adversely affect healthcare quality. We will not have much of a chance of achieving fiscal policies that substantially mitigate our long-term fiscal imbalance as long as delusional hyperpartisans of the left and right cling to their politically infeasible ideal solutions.
I’m surprised the NYT folks haven’t done more with the Wagner Club. I remember when David L. proposed it, but haven’t heard anything since. Maybe it’s because he decided to make it fictional :).
In practice, there ought to be plenty of overlap between the memberships of the Announcement Effect, Pigou, and Wagner clubs. I’d certainly be happy to be a member of all three.
Yes, the overlap would be great and would consist of the members of the (not yet established) Rationality Club and the Straight Talk Club, whose memberships would be mutually exclusive with the Delusional Hyperpartisan Club and with the Eat Cake and Have It Club (which recently merged with the All Gain No Pain Club due to overlapping membership and identical mentality, although it will soon be defunct because members insist that the organization do and provide all sorts of stuff without members paying dues).
Forgive me if this is somewhat tangential, but one large political obstacle to any solution to our long-term fiscal imbalance is the lack of trust in our leadership and the related suspicion that one or one’s group is being asked to sacrifice to an unfair degree as the result of the influence of money on our political process. Today’s Supreme Court ruling makes this situation worse (regardless of whether it has much or little constitutional merit, which I’m not addressing).
I’ve long advocated a voluntary, mostly publicly-funded campaign finance system. Voluntary, to avoid any Fifth Amendment issues, but made so attractive that there is little/no advantage to opting out. In addition to moving our democracy closer to the principle of one person, one vote, the annualized cost of a couple of billion dollars or so would be the best investment taxpayers have ever made, resulting in (among other benefits) less wasteful spending on subsidies / tax breaks and favorable regulations, protections, and other favorable treatment for special interests at the expense of taxpayers and consumers.
I encourage everyone to read about the Fair Elections Now Act at http://www.publicampaign.org/node/38166 and http://www.campaignmoney.org/and donate if you can at https://secure3.convio.net/change/site/Donation2?df_id=1561&1561.donation=form1/site/Donation2?idb=936090063&df_id=1574&1574.donation=form1
FYI – This comment went to the spam folder (too many links, I presume), so I didn’t see it and approve it for posting until 1/26. Sorry for the delay :).
There is no doubt that a credible plan dealing with near- and long-term deficits could be very helpful to the economy, but emphasis on the word “could”. It depends fundamentally on what’s in the plan before could becomes would. Doubling of tax rates? Not going to help. A massive new VAT as the left hopes? Not going to help. both would be very harmful. Getting spending back toward it’s historical levels as a share of the economy and keeping it there — big help. So joining “the club” as described here without clarifying the basic outline of the plan, at least, is hard to justify economically.
This, of course, is why Holz-Eakin correctly refused to acknowledge that tax hikes must be part of any solution. Tax hikes are part of a solution only as a political sop. The substantive problem is we now spend vastly more than normal or is sustainable, and projections are the federal government would continue to do so in increasing amounts. The solution then begins, and should end, with the problem.
JD Foster,
First, sounds like you’re agreeing with me that Holtz-Eakin should not be listed as a member of the Wagner Club (unless you were just accepting my premise arguendo).
Re: Getting spending back toward it’s historical levels as a share of the economy and keeping it there…The solution then begins, and should end, with the problem.
Are you saying you actually consider it politically feasible to get and keep spending at around 18-19% of GDP over the next few decades? If you are, I have a bridge to sell you in Brooklyn (although for the analogy to hold, you’d have to really, really want to buy a bridge and really, really believe want to believe I own it, so much so that you let your wishful thinking substitute entirely for realistic judgment.