Mankiw Admits GOP Policies Are “Repellent”
In his recent New York Times piece Harvard economist Greg Mankiw envisions a presidential speech in 2026 if we don’t do something now to fix our fiscal crisis.
If we had chosen to tax ourselves to pay for this spending, our current problems could have been avoided.
The odd thing about Mankiw’s formulation is that the “current problems” are basically his preferred solutions so we’re not really avoiding anything. I’m not denying that taking early action to fix these problems is sensible – the problems are real. But I’m not sure if conservatives fully recognize that it’s difficult to scare people into action by arguing that our only solutions to long-term problems is to embrace them earlier. A voter might reasonably ask, “if we’re going to face these difficulties no matter what, why not just wait?”
Economists like Mankiw recognize that a dollar today is worth more than a dollar in the future – so even if the difficulties intensify later it might seem that putting them off is “worth it.” But Greg Mankiw, Paul Ryan, and other conservatives argue that in order to prevent the destruction of our current policies we must… destroy all our current policies. You’ll notice that in all of Mankiw’s doomsday scenarios his proposed fix is not to adjust our commitments and tax code in creative ways to preserve the basic structure of our welfare state but to preemptively implement the pain now. It’s as if consent to misery somehow makes it more palatable. Also, conservatives’ policy preferences aren’t merely acquiescence to some Calvinistic political inevitability – they frequently argue the moral superiority of their policies.
In 2026 Mankiw imagines that “we have to cut Social Security immediately, especially for higher-income beneficiaries.” His solution to this in 2011 is to… cut social security.
In the future we’ll be forced “to limit Medicare and Medicaid.” To save us from this problem, the GOP plan is to have people “pay for these treatments on their own or, sadly, do without.”
Republicans including Mankiw favor repealing Obamacare. We better cut middle-income subsidies so we don’t have to cut them later!
Forthcoming budget realities ensure that “subsidies for farming, ethanol production, public broadcasting, energy conservation and trade promotion” must go. As expected, Mankiw thinks we should do that regardless of the bond markets (e.g. here, here, and here).
On taxes, Mankiw predicts the budget will force us to broaden the tax base and eliminate deductions. Of course, economists like Mankiw already want that.
Watch out in 2026: we’ll have to raise the gas tax “by $2.” As a champion of the Pigou Club, Mankiw has been arguing for years that raising the gas tax is a great idea.
His hypothetical president believes these changes are “repellent.” Does that mean that Mankiw, the conservative economist that favors all these changes on their own merits, thinks his own policies are repellent? He’s right that if we choose them earlier they’d be less immediate and “draconian” but if they’re harsh then aren’t they detestable now?
I don’t dispute that doing something soon is essential. I actually support a version of many of the policies Mankiw advocates. But conservatives have been advocating that cutting social security, slashing medicare and medicaid, removing all subsidies, and broadening the tax base are morally preferable. Paul Ryan doesn’t require his staff to read Ayn Rand because he thinks her policies are unfortunate inevitabilities; he considers them optimal and just.
No one believes that our current welfare state and tax policies are sustainable or flawless, but progressives at least attempt to preserve and improve them. It’s possible Paul Ryan and Greg Mankiw are right that all progressive policies will eventually collapse. I just can’t understand the rush to get there.
[update 04/15: Greg Mankiw responds]:
I emailed Professor Mankiw asking what he thought about his policy preferences seeming to mirror the “repellent” and “draconian” view his column imagined.
That wasn’t me speaking. It was a hypothetical future president. 😉