By Alex Schibuola
I am not a member of the Tea Party movement, but am a curious observer, and I am sympathetic to the original objective of reigning in government spending. However, I am pessimistic that the movement will achieve this for three reasons.*
#1 Hijacking of the Tea Party
I cringe at the idea of Sarah Palin being the self-anointed voice of the Tea Party. I see (saw) the Tea Party movement as a revival of classical liberal ideas, or at least of limited government. But now I hear anti-immigration and standard social conservative rhetoric. Consequently, they’re crowing out the original objective of controlling government spending — by taking our eye off the ball.
#2 Many Don’t Want to Really Control Government Spending
Politicians in states involved in defense manufacturing won’t want to cut defense spending. States with many retirees won’t want to cut Social Security or Medicare. States with high poverty rates won’t want to cut unemployment benefits and Medicaid. Everyone has their own pet project that and they won’t agree to cut a bit for one reason: they won’t be re-elected. Damned if you do, damned if you don’t. Lesson learned: don’t create programs that promise people they can consume more than they can produce.
#3 Politicians’ Incentives are Not Aligned with the Nations Interests
This is a systematic problem. Two-year and six-year terms and a lack of term limits means that what matters is the number of days before the nearest election, not the next two to six decades. Each problem (such as Social Security and Medicare) doesn’t have to be worried about until it’s a problem, i.e. until it reaches a boiling point and we are left with two bad options: monetize the debt or default on it. Our fiscal ship is heading full steam for the iceberg.
The ultimate issue is that the status quo is really hard to break. It’s difficult until forces outside our control break it. The improperly aligned incentives mentioned above make perilous procrastination inevitable. I hope that the Tea Party movement will succeed, but realistically I just don’t see it happening. I think we can only bet on technology and innovation from the business sector to overcome politicians’ mismanagement during the past 80 years. I fear that it may not be enough.
*I’m sure this article will make provoke some ire. I more than welcome comments that will convince me I’m wrong — indeed I really hope so.