Semi-Daily Journal Archive

The Blogspot archive of the weblog of J. Bradford DeLong, Professor of Economics and Chair of the PEIS major at U.C. Berkeley, a Research Associate of the National Bureau of Economic Research, and former Deputy Assistant Secretary of the U.S. Treasury.

Monday, October 23, 2006

Stupidest Men (and Women) Alive: National Review Department

Why oh why can't we have a better press corps? Jonathan Chait watches Larry Kudlow in slack-jawed amazement:

The Plank: HOW KUDLOW CAN YOU GO: At National Review Online, Lawrence Kudlow warns that, if Democrats take control of the House, they may institute pay-as-you-go budget rules. Perhaps fearing that the prospect of forcing Congress to pay for new spending doesn't sound sufficiently horrifying, Kudlow proceeds to explain why this is such a terrible idea. His technique is to make things up:

There are essentially two kinds of pay-go. One is a spending limitation that was used by the Gingrich Congress to balance the budget in the 1990s. This would be good. The other is a revenue pay-go, which is not so good.

This isn't some wacky Kudlow opinion here, this is simply wrong. There's only one kind of pay-as-you-go budget rule that has ever been in effect. It came about as a result of the 1990 budget deal--the one with the Bush tax hike that Kudlow and his pals denounced as the greatest betrayal in American history. The rule said, simply, that any new entitlement spending or tax cuts must be offset by cuts in entitlement spending or tax hikes. Hence the term 'pay-as-you-go.'

The rule worked fantastically well, and was credited by various budget geeks with helping to eliminate the budget deficit throughout the 1990s. Then Republicans killed it when George W. Bush became president, and they embarked upon their tax cut and prescription drug bill orgy, neither or which could have passed into law if the pay as you go rules were still in place.

Democrats have tried to reinstate those rules, and have been voted down. They're promising to enact them if they win Congress. Apparently the prospect was so horrific to him it prompted his latest hallucination.

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