A lot of ingrates are whining about the fiscal policies of our new president, but not me. I've never done so well. Prior to his inaugural, I doubt if I would have been categorized as "super-rich," even by the widest definition. But with Mr. Clinton's new tax plan, overlaid on his campaign pledge to raise taxes only for the highest-income Americans, I easily qualify for fat-cat status. That's upward mobility in Mr. Clinton's America.
During Campaign Mode, entrée to the elite circle of "the wealthiest Americans" required proof of $200,000 in earnings per annum. Then the Clintonites assumed office. Now taxes will go up only for Americans making more than $30,000 in "economic income." As opposed to what human beings think of as income (i.e., cash), Mr. Clinton's definition quietly includes fringe benefits, such as employer-paid health insurance, and the implicit yield from owned assets (like the rent you could charge for your house if you vacated it—which, given the portentous tidal wave of taxes, you may have to). This accounting bonus adds up to about a third of your "economic income."
All of which allows us to calibrate a CCF (Clinton Credibility Factor): 20,000 to 200,000, or 1 to 10. Approximately 10 percent of what Bill Clinton tells you will actually be true, if present trends continue.
Clintongue is an American dialect reminiscent of the distinctive twang of high school debate competition. Here, skilled tacticians concentrate not on convincing open minds that scrutinize arguments but on overwhelming the opposition with a torrent of alleged facts (debating "points") cutely connected and summed via rhetorical flair. In this Advanced Newspeak for Fast-Talking Experts, the Clinton-Carvillites excel by virtue of a pathetically weak field. The press isn't paying much attention to the substance of Clintonomics, the Republicans are brain dead, and Ross Perot is just happy to be on national TV without having to answer for Adm. Stockdale.
So it is in the budget debate. President Clinton's budget was pure, unadulterated VDTS (Vintage Democrat Tax & Spend). Clinton had to bust the notorious 1990 budget deal in order to free up spending for his so-called $473-billion, five-year deficit reduction. (He had grandly announced $704 billion in "savings," but this was pared by 30 percent as soon as someone at the White House found a calculator with an active Duracell in it—the CBO can still find only $406 billion, incidentally.) If you're totally confused, you're following the logic precisely.
By the administration's own forecasts, they will slash the "on-budget" deficit (excluding Social Security, whose surplus we're supposed to be tucking away for the Baby Boom retirement fund) from $307 billion in 1994 to $305 billion in 1998. (Hold your applause, please.) And this counts on massive defense-spending reductions, including the political OUCH! of base closings, and on the Soviet Union's cooperation in staying dead.
Nonetheless, this wisp of a "deficit reduction" plan has stolen the facts and set the agenda for every part of the debate on economic policy. The healthiest productivity measure of Clintonomics is in its artfully executed leaps of logic, winning the economic debate with the most absurd presidential economic platform since the Bush presidency (assuming it had one).
As "Tax & Spend!" loses its ring as a rallying cry, "Grow & Invest!" seems absolutely inspired. And it can be provided without any new taxes—simply "contributions." The Clintonites may well lift the entire U.S. GDP to 8-percent annual growth based purely on the robust recovery they are personally staging in the relabeling sector: More money for welfare/pensions/job training/prisons is "investing in our people." Subsidies for business are "investing in jobs." Funding bloated government make-work projects, "investing in infrastructure." In Clintongue, the only form of consumption is when you, you '80s throwback, hog your income to buy something for yourself. That deprives us of contributions, depletes the infrastructure, disinvests in our people, and shrinks the economy!
The "economic stimulus package" is even more indicative of the power of Clintongue. This "jobs program" is everything that is out of whack with the federal budget process: We're $300 billion away from a balanced budget, but somehow we find $X million for Congressman Heavylifter's municipal pork, er, park, er, "investment in local infrastructure." Even that billionaire cracker Ross Perot sniffed this fiscal ugly, nosing his way to the obvious truth (unremarked upon in the press) that an incremental $16-billion boondoggle would have a hard time creating real jobs if the $1.5 trillion already squandered hadn't yet performed the alleged macro magic. Still, amazingly, Ross (joined by the Republicans) condemned the scheme as simply too little, too late. It won't be but "a small bump" said Ross, who suggests we leave the present recovery unmolested.
Clinton's gotcha! Wasteful government spending ain't "trickle down"—no, that's what private spending does—it's economic stimulus, job-creating economic growth. Clinton's just rolled his midget challengers, who evidently concur that raiding private investment markets to borrow $16 billion will create more economic oodles than will be flushed out of private businesses, which must contract by the identical $16 billion. In Clintongue, "the first serious plan to deal with the deficit" becomes "shop 'til you drop." Score one for the master debaters of Clintonomics. Why couldn't Mondale think of that?
Contributing Editor Thomas W. Hazlett teaches economics and public policy at the University of California, Davis.
This article originally appeared in print under the headline "Selected Skirmishes: Clintongue".