The seasons of government give a special flavor to this city unlike that of any other place. Here it is midwinter, and a whole new world is in bloom.
The dazzling array of economic rescue plans suddenly springing forth from the White House and Congress reflects a wondrous energy of clashing societal viewpoints that we, for want of a better phrase, call democracy in action.
In this time of economic despair, this marvelous process of renewal never fails to impress the most cynical among us. For all its flaws, the system is forced to humble itself to the sufferings of the ordinary when crisis strikes, as it has stricken now with frightening immediacy.
Is this a little twang of hope we feel? A tiny shred of optimism? There`s no doubt that this burst of activity is powerful enough to arouse long-forgotten feelings that government itself can be a positive, sustaining force in our society.
These sentiments are usually bestirred at this time of year, when the State of the Union speech and a new budget bring government back to life. In a few weeks, we are sure, that old cynicism, that hard eye of experience, will return, and we will view them as the hacks and charlatans, simpletons and opportunists that they are.
Something odd happens to us at this time of year, something that lowers our immunity to that dread virus called political posturing. We lose our toughness of mind and grow weak in the knees. We actually entertain the idea that some of these new ideas, or warmed-over old ideas, might actually work.
Why do we let ourselves get drawn into this trap? Perhaps it`s the overwhelming volume of proposals and the dizzying pace of speeches and briefings, and assurances that America is back on the right track. It`s especially hard to resist when someone wants to give us a tax cut, and tells us that spending it right now is in the national interest.
Oh, this season is spectacular right now all right, but it is as dangerous as it is alluring.
In the first place, good economic policy is almost never made in an election year. Each side will try to outdo the other in providing benefits to the electorate. No one will be looking out for the general interest.
A tax cut to end the recession is a bad idea, considering the size of the federal deficit. In anticipation that this would be the result of this year`s congressional session, long-term interest rates have headed back up. Alan Stoga, economist at Kissinger & Associates in New York, said a tax cut might actually delay the recovery for this reason.
Barry Bosworth, economist at the Brookings Institution, said people who have seen their incomes stagnate in recent years might be receptive to a tax cut, but that ”we are going to bankrupt ourselves if we try to replace that decline in income by cutting taxes.”
In this day and time, when the U.S. economy is closely connected to the rest of the world, tax cuts don`t help us as much as we believe, Bosworth noted. The benefits spill over to other countries, the Japanese and the Germans, who sell and invest here. ”Other countries would love to see a strong fiscal stimulus in the U.S.,” he said.
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If we want to get out of the recession, Stoga and Bosworth said, let the Federal Reserve Board take care of it, lowering interest rates until economic activity quickens, then builds into a real recovery. The nice thing about monetary policy is that it can be turned off quickly when there`s a danger of inflationary pressures. You can`t do that so easily with tax cuts.
And if Congress wants the country to escape from its long-term slide, it should focus entirely on policies that will put us in better shape to compete in the future.
This includes spending more money on research and development for commercial activity, rather than on developing weapons. It includes policies that will put more technology in the hands of workers and, obviously, improve our educational system. And it requires that the powers of the banking system be clarified.
All this is taking a back seat to the tax-cut craze, which we can write off to politics. But as I sit here and watch this amazing engine of democracy gearing up for action, I wonder about the wisdom of making our economy more vulnerable to future recessions.
But hope is not gone. The swirl of activity and the clash of competing plans tells me that the whole exercise could wind up in an old-fashioned stalemate. Sometimes the best outcome of democracy is nothing.