Conservative Economic Silliness

The economic crisis has brought out the worst in quite a lot of pundits, both Left and Right. Many liberals think that the country needs a two trillion dollar plus bailout, and that Wall Street is fundamentally evil and to blame for this whole mess. Some, such as Michael Moore, even go so far as to advocate full-blown socialism.

Unfortunately, conservatives are not in a position to criticize, as some of their ideas are every bit as nutty as the very stupidest things the liberals can come up with.

In a December 14 column, Jeff Jacoby proposed completely eliminating all federal taxes for two months—Social Security taxes, income taxes, everything. This scheme caught on—Sean Hannity, Next Gingrich, and Mike Pence, among others, all immediately jumped on board. This plan has become very popular among conservatives.

That’s too bad, because it wouldn’t work. First, the economic irresponsibly of this plan is incredible. The federal budget’s deficit for 2008 is already well over a trillion dollars. Can the government afford to lose a whole sixth of its annual income? Unless the government cuts spending by a sixth (it won’t), the cost of this proposal will only be put off till later. And even if we assume that the plan would stimulate the economy in the short term, it would mean a much higher price in the long run.

Republicans claim to be about fiscal responsibility. Losing a sixth of the nation’s budget (when it is already hard up for money) does not fit that definition.

Anyway, a tax holiday wouldn’t work anyway, for the same reason that stimulus checks don’t. People don’t base their spending habits on the money they have—they base them on the money they are likely to have in the future. So even if Washington did declare a tax holiday, it wouldn’t result in a cornucopia of private spending; instead, consumers would just hoard money for hard times.

Conservatives often complain about unfavorable media coverage portraying them as stupid and economically illiterate. Here’s a suggestion—maybe conservatives should look and see if the media is right. Much of the conservative movement favors an economic plan that is stupid and impractical and wouldn’t work. That doesn’t inspire confidence.

True, the ideas liberals have for the economy aren’t much better. But then, “our ideas might be bad but their plan is even worse” isn’t much of an economic policy.