On the page opposite we are pleased to reprint Rep. Bill Gradison's plea to his colleagues in Congress to avoid a tax-cut "auction" during this pre-election season when Republicans and Democrats are "furiously" outbidding one another in an effort to placate recession-worried voters.
This is good advice which comes from a Cincinnati Republican who has long adhered to old-fashioned conservative economics, the kind that looked askance at the Reagan-era supply-side fiscal policy of borrowing to achieve prosperity -- and tripling the national debt.
Mr. Gradison points out that various proposals being aired on Capitol Hill are "schizophrenic" in that some are aimed at encouraging savings while others are intended to boost consumption. What we are "bidding so furiously to purchase," the congressman states, is "not faster economic growth but a bigger deficit, lower national savings and slower long-term growth in our standard of living."
President Bush was also vociferous in condemning what he called "congressional panic" just before leaving on his overseas tour. Like Mr. Gradison, he decried legislation that would "bust the budget agreement" and said he did not want to become "caught up in a bidding war." But unlike Mr. Gradison, the president may switch position if it appears his re-election is in doubt.
The Gradison warning should alert the country to a number of contradictions in tax-cut oratory.
A quick fix won't fix the economy short-term or long-term. If you raise taxes on the wealthy and cut taxes on the middle-class, which may be desirable social policy, the net economic impact will be negligible. If you slash defense spending and use the alleged "peace dividend" to cut the deficit, increase savings or boost domestic spending (take your pick because they cancel one another out) the economy actually may be slowed. If you try to cut capital gains, you can lock up capital as investors await the outcome of the debate. If you broaden Individual Retirement Accounts with the purported aim of helping middle-income voters, you may actually be helping the upper-income bracket.
We don't expect drum-beaters on either side of the partisan tax debate to pay much attention to the Bill Gradisons of this world. But we are grateful he and other skeptics dare to speak up.