Larry Mantle |

The debt ceiling and its huge ideological chasm

With our continuing coverage of the debt ceiling debate, I’m struck by how convinced each side seems to be that its economic conclusions should be obvious to everyone else.  One side states that the other is carrying water for special interests, instead of recognizing that true belief runs deep.

Monday morning on AirTalk, we spoke with liberal economist Robert Reich.  He argued that the pending deal includes no stimulus spending, therefore sentencing our economy to the continuing doldrums.  Reich also passionately argued that the current tax system is unfair, penalizing middle-class Americans and rewarding those who could afford to pay more.  In Reich’s reality, government stimulus and additional revenue create jobs.

Next up was Grover Norquist, the president of Americans for Tax Reform, the group that signed up many Republicans to its “no new taxes” pledge.  He claimed that increasing government revenue takes money out of the economy and costs large numbers of jobs.  In Norquist’s reality, lower taxes and decreased government spending are the only true stimuli. 

Each man used historical references in an effort to bolster his case.  Though we have no controlled studies to objectively determine economic cause-and-effect throughout history, both men are completely certain of their economic world views, and quick to dismiss opposing arguments.

I wonder how much of one’s personal belief system about economics comes from our emotional interpretation of the world, instead of logical conclusions. 

It would be interesting to find the person whose lead values are personal freedom and individualism, who also believes taxes need to increase to provide more for those in need.

 Similarly, I’d love to talk with someone whose lead values are societal equity and more comprehensive government provided services, who argues that lower taxes and less government regulation is the route to making it happen.