Finally, we know that neither presidential candidate has the vaguest idea how to get the budget under control. Obama\u2019s taxes on wealthier families will surely discourage the investment we need to get the economy rolling again. McCain says he will cut ineffective programmes, but he won\u2019t identify the programmes he would axe.<\/p>\n
Ronald Reagan solved that problem by putting in a figure for such cuts, followed by an asterisk, guiding the budget reader to a footnote advising that the programmes to be cut would be named at an unspecified future date. McCain might have to dust off that old dodge, while Obama would have to persuade his Democratic colleagues to reduce entitlement spending. Neither prospect is sufficiently bright to relieve the budgetary gloom that has been deepened by the Freddie and Fannie takeovers.<\/p>\n
Nothing in sight is likely to offset the downdraught that is ripping through the economy right now. But if the housing market bottoms out at the end of the year or early in 2009, as Alan Greenspan says he expects and as falling mortgage rates suggest is possible; if the easing of commodity prices enables the Federal Reserve to keep interest rates stimulatingly low; if exports continue to boom despite the strengthening dollar; and if productivity keeps rising, we should see a recovery sometime next year. Then, tax receipts would rise, and the flood of red ink might slow to a trickle.<\/p>\n
Without that, we will have to rely on the wisdom of our political class, and its willingness to cut the cost of the entitlments programmes. If you believe such wisdom and courage exist, I have a bridge in Brooklyn I would like to sell to you.<\/p>\n