Obama's Budget: Playing Devil's Advocate

In the last week, many liberal Democrats have taken to ridiculing the center-right and right-wing reaction to the administration’s budget proposal. They say the opposition is talking as if the sky is falling, when in fact President Obama is simply trying to right 30 years worth of Reaganomics’ wrongs. E.J. Dionne Jr., the president’s personal cheerleader in print, says capitalism isn’t going anywhere; it’s just going to operate in a way that properly redistributes wealth from the wealthy to the working class. Daniel Gross of Slate asked, “What war on the rich?” And White House Press Secretary Robert Gibbs took on Jim Cramer, a CNBC Obama supporter during the election, who called the president’s plan the greatest wealth destruction by a president that he’d ever seen. Gibbs implied Cramer’s opinion was simply a Chicken Little tirade that deserved little more than laughter.

All the banter may just be politics as usual, but for the sake of intellectual honesty, let’s examine whether the left could in fact be right. Maybe opponents of the president’s budget proposal are overreacting.

The U.S. budget currently stands at 20 percent of the gross domestic product; the Obama budget would raise that to 22 percent. Many on the left claim a two percent rise is far from socialistic and is well worth the ability to provide health care to all Americans in some form or fashion. Looked at in simple percentage points, it doesn’t seem like much (even though in dollars, it amounts to an additional $280 billion per year).

As for taking a little more money from those making more than $200,000 or $250,000 to pay for the extra two percent in budget spending, decreases in tax deductions for the wealthy may not be so out of line if the result is pre-school for those who would otherwise be sitting in front of a television in the living room of the neighborhood in-home daycare provider. If the potential high school dropout stays in school because the government has college covered, then how can anyone argue against that? A happier working class may just make everyone happier, including those paying extra taxes — at least that’s how the argument seems to go. And maybe it’ll work.

Maybe the fear that universal health care will lower the quality of care in the U.S. is paranoid and unfounded. After all, Americans are pretty good at figuring out ways to improve on the past. The fact that civil servants in most areas of the country preside over ridiculously slow departments of motor vehicles, for instance, doesn’t speak at all to how well state-run medical centers will operate (assuming we ever migrated from a public/private system to a single payer one.)

Maybe it’s also an unfounded fear that a cap-and-trade system for pollutants will raise the cost of energy for all Americans, not just “the rich.” Or if so, perhaps the tax refunds of $400 per year will offset the increase in energy costs (and resultant food costs, since all things must make it from the farm to the grocery store through some mode of transportation). The bottom line is we just don’t know.

Jacob Weisberg of Slate laid out a fairly decent argument on Sunday for why the U.S. could never become another Europe even if Obama’s plans are enacted. The long and short of it was: the country has an historical aversion to too much government control; the U.S. was founded on that aversion. At the end of the day, Obama himself is conscious of that fact and will not choose to implement plans in a European way, if only because serious resistance is assured. Maybe Weisberg’s theory is correct. Maybe Obama’s proposal is simply a decision to start at a position he knows many will consider extreme, to facilitate coming to the middle, looking thoughtful and pragmatic as he does. But what if Weisberg is simply doing a bit of wishful thinking?

As I play devil’s advocate, look on the bright side of life, and hope for the best, certain unavoidable facts keep emerging in my consciousness. People have come from all over the world, crossing both oceans to be a part of the U.S. way of life. What began as a European migration on the east coast and a primarily Chinese migration on the west coast in the late 19th century expanded throughout the 20th century to include other East Asian immigrants and Latin American ones, to say nothing of the migrations from the Caribbean and African nations. Until 1952, people who did not have Caucasian skin could not become naturalized U.S. citizens — and still immigrants came. Why is that? Why is here where so many want to be if we’ve been making and spreading our wealth incorrectly for almost two and half centuries?

Yes, a housing bubble that could not be sustained and that many took unconscionable advantage of, even as the bottom was falling out, has left the U.S. economy in a mind-bending state. But tinkering with the whole system because one part of it went haywire for the better part of 20 years may itself be the overreaction.