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Jun 30, 2011


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Dennis Sanders

Interesting. I would be curious to get your opinion on Paul Ryan's budget plan. I've heard a few folks say that it's anti-Christian. I don't think it's a perfect plan and it has issues, but it did get conversation started.

Also, Ross Douthat also wrote a review Zakaria's essay:


Michael W. Kruse

Thanks for the link. Good stuff.

I don't know Ryan's plan in any detail. I didn't find what I know about it to be all that outrageous. I think the most negative reaction comes from those who see an expansive role for government in dealing with social issues. It is hyperbolic moralism. Like you, I think the Ryan plan gets the talks going (and we might ask where is the Democrats' plan?) I thought the Bowles-Simpson report was a very good starting point as well. Seems all the Dems strategy is to continue driving the debt higher with ineffective stimulus packages while blocking all reform, combined with blaming George Bush for all our problems.

Armstrong is getting a core principle I embrace. I think resistance to change for resistance's sake is wrong. I think radical disruption is usually wrong. And I think a "conservative" strategy of "We aren't them!" (i.e., liberals) is not sustainable. I think "now new taxes" as a centerpiece of policy shows a considerable lack of intellectual fortitude. What we need is a vision for what the future might look like that address the many problems we face. It needs to be a vision that builds on our societal strengths, including markets, instead of the radical social engineering that too many Dems would do if they could get the votes.

What did you think about Armstrong's vision driven incremental change?

Dana Ames

Another blogger I read pointed to this article:


I think this writer makes sense. I expect you would agree with his last line...

I'm absolutely not averse to paying more in taxes, if the money will be used to "promote the general welfare". I think too many "conservative" folk have forgotten about that part of the Constitution. They are fine with cutting programs, until it comes to something that benefits them.


Michael W. Kruse

When the only hammer you have is tax cuts, every problem looks like a tax related nail. ;-)

These conservatives are trying to channel Reagan. But when Reagan did his tax cuts he was shaving 20 to 30 to 40 percentage points off of some taxes. And let us remember that he signed in tax increases of various types five times later in his terms. We aren't going to be able to make big cuts and the increases being proposed are chump change increases compared to what was previously cut ... and they are being raised on a base that is low by historical standards.

So I guess my big point is that a tax cut won't save us like it did thirty years ago, and modest increase in taxes will have little positive impact. The real issue is spending, and especially entitlements. Running around yelling about the evil of taxes doesn't give us a vision or addressing these to problems as we seek a just society.

Dennis Sanders


I actually went back to read Armstrong. I think he makes some good points and I think what he might be trying to get at is that conservatives don't really have a meta-narrative or vision of their own. In many ways, they are just reacting to the meta-narrative of liberalism which has been the main story since the 1930s. I think the problem with Ryan's budget plan is that it really doesn't have a story to tie itself to. The genius of Reagan is that he was able to tie the conservatism of that day to the larger American meta-narrative and it worked. But today's conservative is more of a reaction than anything else and what we need today is a new story, because the older liberal story doesn't work anymore.

Hope this makes sense...

Dennis Sanders

So here is another question. In Minnesota, we are dealing with a shutdown of the state goverment. The GOP thinks it can balance the budget with only cuts and the Democratic governor wants to accept some cuts and raise taxes only on upper incomes. I'm not opposed to higher taxes, but I've had an issue with only taxing upper incomes while leaving the middle class unscathed. I've always considered that if taxes should be raised they should be borne by everyone save the very poor. There was a third party candidate that proposed broadening the sales tax, but he didn't win the election.

Usually the case to be made taxing the rich only is that they pay a lower percentage of their income than other classes, even though they pay more. I've argued that a "tax the rich" strategy will hit more folks who are "upper middle class" that will pay a bigger share of the burden than they uber-rich.

The other problem is that I don't think a tax-the-rich strategy will cover enough of the costs of government, which means that at some point people will come back to ask for more income.

I guess I'm trying to get your views on this. I always seem to be in the minority, especially among mainline groups that thow in something about social justice to shore up their arguement. Again, I'm not against raising taxes, but I think they should be shared in proportion to income and not just focused at one segement of society.

Michael W. Kruse

I hear ya, Dennis. Like you, I don't have an aversion to raising taxes necessarily. Yet the Mainline circles you and I run in are in a habit of defining social justice PURELY in terms of equalization of income and in the habit of ignoring matters related to production in favor of distribution. Taxation is less about achieving an optimal mix of policies than it equalizing wealth/income.

There are at least there ways to consider economic justice.

Equality - Even distribution of resources.
Merit - Distribution of resources based on merit ... produce more and you will have more.
Need - Distribution based on need (however "need" may be defined.)

If you equalize on one, then you will be very unequal on the others. Justice requires a number of considerations for sustainable flourishing society, including offering incentives for desired behaviors (like creating wealth.) IMO, The "tax the rich" mantra is really just a parallel of the same ideological as the "no new taxes ever" mantra.

You asking broader questions about incentives (ex. should everyone pay some) and I think that it is right discussion to have. But unfortunately that requires people to be discerning not ideological. ;-)


You're right that the real issue IS spending. The federal government of today would be unrecognizable to the founders. It was never intended or empowered to be the agent of wealth distribution and "justice" that so many on the left want it to be. The "general welfare" clause--just like the interstate commerce clause--has been stretched, twisted, and distorted into a monster that would appall those who wrote the constitution.

The shouts of "no new taxes" are motivated not by an unwillingness to fund a necessary level of government, or a desire to ignore the poor and genuinely needy. They are, rather, about desire to reduce reckless spending by refusing to subsidize any more of it. The current administration has increased federal spending by nearly 20% at a time when taxpayers are seeing their incomes drop or their jobs completely disappear. Federal spending as a percentage of GDP has risen dramatically, and those opposed to new taxes to feed further growth are refusing to go along with it.

Our federal government is like a college kid who has run up thousands of dollars of debt using a credit card provided by his parents...and now mom and dad are saying, "enough is enough, you have to learn to live within our means." So they want to cut up the card and put junior on an allowance that forces him to spend only what's necessary.

Junior doesn't like that, and neither do junior's friends.


I think when it comes to the world of politics, that we should not view on what other people think, but only take on board what we think ourselves. Many people get caught in the moment and say things which are influenced through an outside source. It is ultimately important to stay realistic and to follow our hearts.

Dan Anderson-Little

OK, I guess someone has to represent a more liberal viewpoint here. First of all, let's remember which President left office with a budget surplus (a hint: his party starts with a "D") and whose successor left office with a massive deficit (caused largely by pushing through tax cuts and funding two wars AT THE SAME TIME, and pushing through the largest unfunded entitlement program (Medicare D) of all time--and surprise, his party starts with an "R").

To be sure, the deficit and debt have ballooned under Obama, but to be fair he did come into office during the biggest economic downturn since the Great Depression. And what would have had him do? Let the auto companies fail? What do you think the unemployment rate would be now if that had happened? How much in unemployment compensation would we be paying if that had happened? Or would that just be "income redistribution" and the millions of extra people out of work would just have to suck it up and go to their local food pantries? Because remember, it's not just the auto workers, but all of the other people who have jobs because auto workers have jobs.

Governments aren't like teenagers with credit cards: they are countries which can create jobs by stimulus spending. Now, I realize that eventually, the debt and deficit will need to come down, but the "just like families, a government can't live beyond its means" is pure nonsense. I would agree that entitlements need to be reigned in--I would support means testing for Medicare and (gasp!) Social Security. I realize that Social Security is a kind of retirement plan that you pay into, but if you make a certain amount of money in retirement, then I don't have a problem with those folks not getting as much or any. But the big thing that hasn't been mentioned once in this thread is defense. Why don't conservatives ever (well, that's hyperbole, but not by much) talk about cutting defense. Talk about a massive government stimulus and a huge suck on the economy (I heard one conservative member of Congress recently say that government never creates jobs--tell that to the millions of people who make their living making weapons or cooking food for the military!). There is also little talk about cutting agricultural subsidies--because then you might lose the Iowa caucus! And what about the prison industrial complex. Our so-called War on Drugs costs us immensely, but no politician will come out and oppose that either. It also is a big job creator. Until all of this is on the table, I am suspicious when the only talk of cutting the budget centers around entitlements.

Let me come clean with my liberal credentials: Yes, I believe progressive taxation. I do believe that government is in the best position to address certain issues--and I would include healthcare in that list of things (along with education, regulation of the environment, consumer protection, criminal justice, working to overcome systemic racism and sexism, public works to name a few). I also agree that we can't fund everything. It's always a balance--and that is what I find so disturbing about the current rhetoric coming from Washington. The Democrats swear they won't even consider a plan that touches entitlements, the Republicans swear they won't even consider a plan that raises taxes (and a balanced budget amendment? what school of economics is THAT from?), and nobody will talk about defense. (I must say at this point, that it doesn't help that so many conservative leaders in the government wink and nod at the talk on TV, the radio and the blogosphere that our current President doesn't really act like an American and doesn't believe in American exceptionalism--what an amazing waste of time and energy!).

OK, my rant is over. Us liberals don't all believe that every entitlement is sacred and that rich people need to be punished for being rich. It's that when we talk about making cuts, we worry that talk about "shared sacrifice" will hurt the poor and disinherited much more than the rich and that a baseline of human well-being is something we will not give up.

Dennis Sanders


I'm sorry if you feel offended by the discussion here. I don't think I'm here to bash liberals, but I do want to be able to share my views and to share some criticism about what might be considered liberal policies, because I don't feel that I'm able to share them in many mainline circles. I've had to spend many a time with my liberal friends saying rather harsh things about conservatives and what I've seen here has been rather mild.

I'm not here to bash liberals. Most of my friends are liberals. My partner is an unabashed liberal. But that doesn't mean I can't be constructively critical and I would hope that you would respond in kind instead of going into a long, defensive rant that doesn't enlighten anyone at all.

I should also add, that while I lean conservative I haven't "drunk the kool-aid." I have been critical at conservative policy, such as not accepting some tax increases.

I'm all for a good argument on things like policy. It's how we all learn things. But what I don't like is when someone has a chip on their shoulder and decides to tear down other people who don't agree with them. It's not very civil.

Michael Kruse

Dan and Dennis, I have the advantage of knowing both of you. I hear and appreciate both of your perspectives. Dan is my faithful challenger and I always like the passion he brings. I'm okay with his comment but I'll have to wait til the morn to form a coherent response.

Dan Anderson-Little

@Dennis - I am in no way offended by the discussion here. If I were, I would simply leave. In fact, I keep coming back to the Kruse Kronicle because Mike is fair, curious, intelligent, faithful, and he always pushes me and makes me think in directions I would rather not. I come from the self-righteous religious left tradition--and quite frankly, this blog is a really helpful (and non-offensive) way to expand my own thinking. I piped up in this conversation because I felt some other viewpoints needed to be aired. Sorry if my tone conveyed offense. And thanks for taking time to write.

Michael W. Kruse

My attraction to John’s piece was this notion of what I call “big versus small” dials. Imagine an economy control panel with all sorts of dials and levers. I would say that liberals tend to want lots of big dials that you can turn to effect massive changes. Conservatives (in the more traditional sense of the word) want lots of small dials that nudge this way and that but don’t generally allow for huge turns.

Liberals will tend to view conservatives as too cautious and blocking progress. Conservatives will tend to view liberals as too optimistic in their ability to understand the full impact of the big changes they want to make and too dismissive of the wisdom that comes from societal arrangements that have been forged through practical interaction over time.

We know that change happens and adjustments must be constantly made. What I think (traditional) conservatism rejects is reactionary reflex as well the French Revolution model … changing what needs to be changed while conserving what collective wisdom has created.

An alternative metaphor might be organic versus mechanical. I think the conservatism John is espousing sees the economy as a complex organism that is growing and evolving, not a machine where entire pieces can be swapped-out … or the parts completely reconfigured … with no consideration for the rest of the machine.

As to the budget debates … a few thoughts.

In the early 1980s we saw significant tax rate reductions and some initial spending cuts. We say significant economic growth but no surpluses because spending was out of control (and part of that was spending to drive the USSR into oblivion.)

With the 1990s we saw a minor increase in taxes with significant spending cuts. This was coupled with the peace dividend and the dot.com boom. We saw surpluses.

With the 2000s we saw minor to modest tax reductions and acceleration in spending. Commitments to Afghanistan and Iraq were a piece of the problem. I think the recession was brought on by a combination of A) government regulation that required home loans be made to people who could not afford them, B) an insufficiently regulated financial sector that made transparency a joke, and C) uncharacteristically cheap credit in the US brought about by emerging nations investing in US markets instead of their own.

(And just a footnote. It wasn’t tax cuts for the wealthy in the 2000s. It was tax cuts for everyone and it made the tax system MORE progressive. The payers at the top got the smallest percentage reduction in tax rates and the percentage reductions got larger as you went to the bottom. The threshold at which you had to pay taxes was raised, taking millions of the tax roles. See my earlier post. http://www.krusekronicle.com/2011/04/taxing-questions-reprise.html)

Today, taxes are not that high (as in 1981). You can’t cut them enough to make a big impact on growth or the deficit. A modest increase in tax rates, while not likely to have a major drag on the economy, also will not significantly address the deficit … it certainly won’t spur growth. What are the options? Reduce spending (and, yes, that means ag subsidies, defense cuts, and means testing for entitlements in my book.)

I really think Obama missed a big opportunity with the Bowles-Simpson report.


And what would have had him do? Let the auto companies fail?

Yes. That's why we have well-established bankruptcy laws and processes. The real goal of the federal intervention was not so save those companies (they would have survived and undergone necessary restructuring if they'd been allowed to go through bankruptcy), it was rather to protect the interests of the auto industry labor unions.

Governments aren't like teenagers with credit cards: they are countries which can create jobs by stimulus spending.

Our federal credit card problem pre-dates the so-called "stimulus". Bush was profligate, but Obama is profligate x 3. And I realize it's an article of faith for many on one side of the political aisle, but even the current administrations own experts are now saying that the incredibly costly (and phony) stimulus didn't work. We've just engaged in the largest Keynesian stimulus experiment in world history, and yet unemployment is still over 9%.

We can't continue borrowing 40% of our federal budget any more than you or I could borrow 40% of our own family budgets every year. The fact that it's a govermnent doing it doesn't make it any less irresponsible or untenable.

Why don't conservatives ever (well, that's hyperbole, but not by much) talk about cutting defense.

Well, actually they do. But, unlike the majority of today's federal spending, defense is a constitutionally mandated responsibility of the federal government.

And that's why there's also talk in conservative circles about not just cutting subsidies, but eliminating entire federal departments...like agriculture, energy, education, and others that are both costly and ineffective.

The only possible solution to our current debt problem (if, in fact, it's not already too late to avoid a major crisis) is to dramatically reset and restructure the way federal entitlement programs work. The current programs are going broke, and they're unsustainable.

And taxing the rich (i.e., the job creators at all levels of the economy) even more than we already do (http://tinyurl.com/4j37num) won't do anything other than warm the hearts of those who live to engage in class warfare. Not only is there not enough money in their pockets to make a significant dent in the national debt, but such a strategy would further inhibit, discourage, and crush job creation.

As Rubio said, the way out is to create more taxpayers, not higher tax rates. We need to abandon the current failed big-government approach to managing the economy and instead pursue a pro-growth strategy that unleashes the private sector as happened in the '80's.


I really think Obama missed a big opportunity with the Bowles-Simpson report.

I think you're right. If he were really interested in consensus and something resembling bi-partisanship, he would have used that as a starting point.

Instead he proposed perhaps the most irresponsible and profligate budget in the countries history...which got voted down 97-0 in the Senate.

The problem with Bowles-Simpson is that is tried to actually deal with the entitlement problem, and to my knowledge the President has steadfastly refused to propose anything at all in that regard.

Dan Anderson-Little

And THIS (see the thread above) is why I keeping reading the Kruse Kronicle! Thanks Mike for urging us all on!

Dennis Sanders

And thanks for responding. It helps me understand your take a little better.

Dennis Sanders

Yes. That's why we have well-established bankruptcy laws and processes. The real goal of the federal intervention was not so save those companies (they would have survived and undergone necessary restructuring if they'd been allowed to go through bankruptcy), it was rather to protect the interests of the auto industry labor unions.

This is probably where I am not as conservative as others. It really went against what I tend to follow, but I think that the government had to do something concerning the auto companies, not because of the unions but because of the situation.

Mind you, this is a personal issue for me, because I hail from Michigan and both my parents are retired GM autoworkers. When the economy was melting down in 2008-9, it would not have made sense to just let the auto companies fail. Maybe they would have just gone through a normal process, but because the market was so unsteady and everyone got spooked, I don't know if either company would have survived the process. And what would happen if an additional 100K were thrown out of work? I don't know if the economy would have been strong enough to absorb the shock.

If this had happened, say two years earlier, I would say the Washington should not have stepped in, because at that time, the economy was fairly strong. However, early 2009 was a shaky period and as we are finding out, we were pretty close to a total crash.

More often than not, I think government should try to stay out of business' way. But if what business does has the potential to create harm to the greater economy, then government has to step in. Sometimes we do have to hold our nose and do the deed to stop the bleeding.


Thanks for the thoughtful response, Dennis.

But if what business does has the potential to create harm to the greater economy,

I actually think it does even more harm to intervene the way the federal government did. First, the federal government really has no business at all deciding to bail out private companies.

Second, when such bailouts occur, you're removing a critically important market consequences that punish bad management and serve as correctives that keep business more honest and efficient than they'd otherwise be.

Third, standard bankruptcy processes for Chrysler and GM would have required that they restructure and (most importantly) re-negotiate the absolutely insane labor contracts they had with their unions...you know, the ones that broke their financial backs in the first place.

This is the reason that the current administration intervened. They knew very well that GM and Chrysler would rise from the ashes if they went through established bankruptcy procedures, but it would cost their labor union buddies their current contracts...so they did them a big favor by intervening and handing them billions of dollars in equity at the expense of the corporate bond holders.

It's a case study in how big government serves its own interest at the expense of the free market.


As an Australian I find it very difficult to understand why Ronald Reagan is considered to be a hero in so called conservative circles. Especially if one reads the book The Man Who Sold the World: Ronald Reagan and the Betrayal of Main Street America.

Plus I find this short video clip sums up what so called conservative politics in the USA is really all about.


Goebbels would have loved it.

Sinclair was correct in his prediction that fascism would come to the USA in the name of freedom, waving a flag in one hand and holding a bible in the other.

Michael W. Kruse

Thanks John. I would point out that the thinkers who laid the groundwork for national socialism in Germany were driven by their distaste for free markets and independent societal institutions. All institutions of society should be accountable to the government who will channel them toward the common good. This was wedded to jingoism and xenophobia.

America has never really been threatened by communism. Fascism rooted in moralistic fervor has been the challenge. The US right too often tends toward jingoistic nationalism, believing we can do more good with international interventions than we can. Yet their is a strong inclination on the left to make every institution of society an extension of government who will insure the common good. To date, these two fascist tendencies have not been really wedded. I don't subscribe to the idea that somehow conservatism is a prelude to fascism. Fascism takes extreme elements from both left and right.

I find it interesting that you find Perry's ad so disturbing. Apart from the "last great hope" stuff, it strikes me as a contrasting upbeat ad you could swap into the politics of any number of countries. Not sure what is distinguishing in the ad.

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