Budget

Former Obama Budget Chief: Forget Democracy. How About Rule By Technocrats and Independent Commissions?

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democracy in a box

Former Office of Management and Budget chief Peter Orszag has had it up to here with democracy:

To solve the serious problems facing our country, we need to minimize the harm from legislative inertia by relying more on automatic policies and depoliticized commissions for certain policy decisions. In other words, radical as it sounds, we need to counter the gridlock of our political institutions by making them a bit less democratic.

What's the big problem with democracy? Well, for starters, not enough deficit spending. Yes, really. Orszag complains that it's hard to just run up the federal credit card tab as high as he wants to, even though "virtually all responsible economists agree" that America, despite running record-setting deficits in recent years, needs bigger deficits in the short term. 

Virtually all responsible economists agree that we should be aiming to reduce the deficit in the long-term but not in the short-term. We need an even larger deficit in 2011 and 2012, to support a weak economy—but a much smaller deficit in 2020 and 2050, to put the nation back on a sustainable fiscal course. Yet our polarized political system has proved incapable of reaching a consensus on this common-sense approach.

What we need, then, are ways around our politicians. The first would be to expand automatic stabilizers—those tax and spending provisions that automatically expand when the economy weakens, thereby cushioning the blow, and automatically contract as the economy recovers, thereby helping to reduce the deficit. 

That "virtually all responsible economists" label is quite convenient. Who isn't broadly in favor of following the guidance of responsible economists? But is there any doubt that Orszag, with his unflappable faith in the Bigger Deficits Now strategy, would label just about any economist who didn't favor higher short-term deficit spending as "irresponsible"? Peel away the cute anti-democracy framework, then, and Orszag has done little more than argue that America should be governed more by empowered technocrats who agree with…Peter Orszag. 

Indeed, Orszag goes on to argue that "a significant part of the response to polarization and gridlock must involve creating more independent institutions"—independent commissions and panels, presumably packed with people of Orszagian mindset. 

This isn't the first time Orszag has put his faith in the power of independent commissions. As Obama's first OMB director, he put forth a budget that he admitted didn't meet the administration's stated own deficit reduction goals without relying on the eventual recommendations of the president's fiscal commission. Orszag staked a lot on that budget plan: "Frankly I feel like my credibility is on the line in the document that we put out," he told Bloomberg shortly before the budget's release. At the end of 2010, the commission released its recommendations. They were essentially ignored—just as Orszag's self-serving plea to turn policymaking over to more powerful technocrats should be.