Show Me the Numbers
The 2000 presidential campaign has already begun--a
little early for my taste. The speech writers are busily at work spinning out
their anodyne alliterations, their balanced bromides, their cautious clarion
calls. They have already produced for George W. Bush "Compassionate
Conservatism" and "Prosperity with a Purpose." Al Gore seems to be ditching
"Reinventing Government," "Inventing the Internet," "Global Warming," "The
Third Way," and all those other nerdy notions. He is aiming directly at the
soft American heart by offering himself as the "Friend of the Family."
With the change of a few words, George W.'s
compassionate conservatisms could have been delivered by Bill Clinton or Al
Gore. And Gore's qualification to be America's Friend of the Family is that he
isn't Bill Clinton--a qualification he shares with quite a few other
people.
After a while, the
campaign will embrace the "specifics." There will be speeches or position
papers about education, the environment, the budget, and other issues conveying
information about the candidates' intentions. But it will still be in the
domain of advertising--full of "new and improved!" claims, like the ones you
find on cereal boxes.
I had direct experience with this process during Richard
Nixon's 1968 presidential campaign. Nixon had two teams of policy advisers. One
team accompanied him on the campaign and advised him about what to say to get
elected. The other team, on which I served, stayed home and wrote papers about
how he should govern after he got elected. The two teams did not communicate
with each other, fearing, I suppose, diversion from their two different
objectives.
I don't complain much
about this deviousness and evasiveness, and I don't expect it to change. I have
only a modest request. Before the campaign concludes, I would like to see more
attention to the numbers. Many of the policy issues confronting us hinge on
quantities--on how much. Whether a condition is a problem requiring government
remedies depends on how much of the condition there is. And whether a proposed
policy is worth its cost or is likely to be effective also depends on its
size.
One number we already hear relates to taxation. The number
is zero--no new taxes. At some point we will get another number--a percentage
by which the candidate proposes to cut income tax rates. That is supposed to
tell the voter how much better off he will be if the candidate is elected. For
that purpose, obviously, the bigger the number the better. But the tax numbers
need to be seen in national and historical perspective. From the national
standpoint, lower taxes are not necessarily better than higher ones. In the
past 40 years, federal taxes as a percentage of Gross Domestic Product have
been 18.8 percent of GDP plus or minus 1.8 percentage points. (Surprisingly,
the low point came in the Johnson administration, not the Reagan
administration.) The candidates should tell us where, inside or outside that
range, they would want federal tax receipts to be. That would give us some clue
to the national economic significance of the difference between them.
The tax question
immediately raises the question of the budget surplus. For decades we had a
rule for the proper relationship between government expenditures and
revenues--or we pretended to have a rule. The rule was that the budget should
be in balance, meaning no deficit. But we are beyond that now. We have in
prospect some years in which, with existing policies, there will be a surplus,
and there is a question about how big that surplus should be. That is a
question neither the president nor the congressional Republicans want to face.
In his recent budget, the president tried to conceal the fact that there was a
surplus, and the Republicans, with their talk about a "lockbox" for Social
Security, have confused everyone, probably including themselves. But the
subject is important, and the candidates should tell us how much, if any,
surplus they would plan to have.
As long as the country continues to bask in prosperity,
there will be no debate about general economic policy during this campaign.
Everyone will agree on the most important requirement for sustaining
prosperity, which is to keep Alan Greenspan healthy. So, candidates are likely
to focus, as George W. has already done, on those who do not share in the
general prosperity--those who have been left behind. But there are hard
quantitative questions about this. How many are left behind? Is it a major
problem? We have official estimates of the proportion of the population who are
in poverty. It is something like 13 percent and has been near that for the past
20 years. But there are other estimates--equally plausible, which may not be
very plausible at all--saying that the poverty rate has been falling sharply
and is now about 1 percent or 2 percent. Which of these estimates you believe
makes a big difference to the priority you give to this problem. So, if the
candidates are going to make a big issue about helping those who are falling
behind, I would like to hear their views about how many there are.
I give examples only from
areas of policy with which I have some familiarity. But one can also see the
value of quantification in many other areas: health care, education, the
environment, and others.
Asking political candidates to quantify their stands may
seem unrealistic because they don't want to pin themselves down and because the
audience will tune out. But there have been cases where the candidate gave us
relevant numbers--and with success. I think particularly of the 1980 Reagan
campaign. Serious questions were being raised about whether the policies he was
proposing for taxes, expenditures, and the deficit added up. He then made a
speech in September 1980 in which he laid out the quantities involved and the
underlying assumptions. Some people, including me, criticized parts of the
story. But I think it helped to support the idea that he knew what he was
doing. In a limited way, the Reagan speech served as guidance for his policies
after he came into office. So, I don't think the request for more numbers is
simply the idiosyncrasy of an old economist.
