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Meaning, Public Money Thrown Away Down a Dark Hole

Meaning, Public Money Thrown Away Down a Dark Hole

Yesterday news broke  that President Obama was going to freeze spending.  Many think this is a pivot to the right an an acknowledgment that the President understands the seriousness of the Brown election in Mass.  Politico noted:

The move, intended to blunt the populist backlash against Obama’s $787 billion stimulus and an era of trillion-dollar deficits — and to quell Democratic anxiety over last Tuesday’s Massachusetts Senate election — is projected to save $250 billion, the Democrats said.

The freeze would not apply to defense or foreign aid or spending on intelligence, homeland security or veterans.

Rhetorically, then, yes, it appears Obama is reacting to voter discontent and worry over rising deficits and government spending.  As CNN reported, 3 out of 4 Americans believe the “stimulus” a waste.  But it does not mean his new plan will control spending.  The move angered some in the base.  And some on the right, notably Bill Kristol, thinks it is a decent move.  But while it is a great rhetorical move to announce that spending will be frozen, will it have the desired effect–in other words, will it indeed control spending?  Unlikely.

The administration is set to spend billions more on job creation (others think it will freeze spending on jobs) rather than offering businesses tax incentives to create jobs, and as the WSJ noted last night, the freeze only affects 17% of the federal budget.  So, 5/6ths of the budget is left untouched.  There is also the economic problem that the freeze is a freeze of already high spending and so is not really a freeze but the appearance of a freeze.  Regardless, effective rhetorical assurance?  Yes.  Actual budgetary effectiveness?  Unlikely.

As far as politics is concerned:  Obama is in a rock and a hard place–any moves he makes to his right will offend his base, and any moves to the left will offend the Independents. Either way, he loses the majority.  That seems to be the political situation in  the country at the moment.

Update:  Kudlow is digging the freeze:

Update 2:  CATO has a pretty negative view of the “freeze” that is similar to my initial reaction in terms of actually doing something about the deficit and the overall budget.  Handy chart to follow:

Freezing, but still Spending

Freezing, but still Spending