The Shape of Things Not to Come

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It was suggested to me by a number of parties this week that I should give some explicit account of why the blog has turned in what you might call a more “neoliberal” (though I don’t really like the term) direction of late. There’s a couple of reasons. One is simply product differentiation—I don’t think just writing the same posts as Kevin Drum and Ezra Klein and Jon Chait is what the world needs from me, but we obviously all have similar political opinions. The other is the point I’ve made before, namely that with the passage of the Affordable Care Act the long struggle to expand the scope of the welfare state is largely over.

Maybe the clearest way to show that is with Austin Frakt’s graphical presentation of the CBO’s baseline scenario:


Get 40 Senators together to filibuster everything and that’s what you get. And when you add in state and local government, that’s a pretty healthy big government agenda right there, especially when you consider that states are shouldering a health slice of the Medicaid bill. Realistically, does anyone think we’re going to increase the overall size of the government faste than that? I sure don’t. And yet there are actually some areas in which I’d like to see the government doing more—specifically nutrion, early childhood education, infrastructure, and probably K-12 education writ large. But on this chart we’re predicting a slow-but-steady decline in non-health care non-Social Security spending.

So the future of American politics is necessarily going to be about things like making the tax code more efficient, finding areas of government spending to cut relative to projection, and thinking of policy measures that will help people that don’t involve spending more money. The conventional wisdom in DC is that it’s not politically possible to sustain the kind of large tax increases on middle class people that are involved in this baseline projection, and the fact that the Democrats position on the Bush tax cuts involves deviating downward from the baseline tends to confirm that. So I certainly doubt an agenda centered around raising even more revenue than we see in the projection is going to work.