Stimulative Grand Bargains

Ezra Klein writes about the idea of a grand bargain on stimulus and long-term deficit reduction that “the two parties should, but won’t, strike.”

He’s of course correct. But if I were in charge of trying to broker a bargain that I think would at least tempt people, I’d be aiming for something more cynical than Klein’s “GOP agrees to spend more now, Democrats agree to spend less later” bargaining. How much do Republicans really even care about long-term spending? What I think would actually tempt people on both sides would be a giant state/local government bailout package paired with a temporary radical relaxation of private business regulation. In terms of who really matters in American politics — politicians who want to get re-elected, rich businessmen, and public service providers — this is win-win. Private sector labor unions, serious small government ideologues, and environmentalists would get skewered. I think those are groups powerful politicians can easily afford to skewer in a go for broke push for short-term job creation. Basically the deal would combine a return to public sector job creation (jobs!) with allowing private firms to hire people to dump toxic waste on pristine wilderness for $2 an hour (jobs!) and would almost certainly succeed in boosting the economy over the short-term and helping everyone get re-elected, albeit at a potentially serious long-term cost.

Now of course this isn’t going to happen, in part because politicians aren’t (I think) actually as cynical as people often make them out to be.