Sunday, August 28, 2011

Tying one's self to the mast with silly string

Richard Thaler, in today's NY Times has words of wisdom on governments' pervasive inability to commit to painful future courses of action with balanced budget amendments or fiscal rules.

Sadly, he fails to stick the landing:

The bottom line is that in matters of governmental self-control there is no real substitute for willpower. If we want to balance the budget over time we are going to have to elect adults to Congress who are prepared to invest now in our country’s future and then, when the economy picks up, take the necessary steps to get spending in line with revenue. The question is whether politicians who act like adults can win elections.

Yes, that is surely the solution to the inability to bind future politicians and the serious problem that optimal policies are often time inconsistent: just find the right people!

Could we not at least try to think of institutional changes that might help the situation instead of calling for politicians from another planet to come and save us?

How about longer terms of office but no re-election? say 6 years in the House, 8 years for President, 10 years for Senate?

Other ideas?


Anonymous said...

Why would politicians be more likely to enact these self-restricting policies than Thaler's policies of choice?

Expected Optimism said...

If there's no possibility of re-election, why would the politicians care about balancing the budget, or really doing anything good for the country? I definitely would not want to live for eight years under a President who had no reason to listen to the voters.

Angus said...

There is a literature (Barro, Ferejohn) where the only way politicians can be induced to serve the public interest is the threat of not being re-elected.

The idea I am trying to get across here is that politicians might actually want to implement an optimal policy but given re-election concerns are unable to do so. Lengthening the term and dropping re-election might serve to allow them to actually make decisions that are unpopular in the short run but beneficial in the long run.

Not saying I'm right, but that's the idea at least.

Tom said...

Perhaps politicians would make more mature decisions if their decisions could mature before the voters (re)considered them.

I favor the "four year vacation" rule: no person may stand for elective office, if he (she) has held a position of trust or profit with or acted as an agent for any government in these United States in the four years prior to inauguration into said elective office.

No incumbents, no recent office holders, no active lawyers, no cops -- in the past four years. You can get reelected if, in the fullness of time, your decisions still seem good.

Big Al said...

How about dispersing them all? In other words, eliminate DC as a power center. You elect your rep, and she/he stays in the district and communicates via email, telephone, whatever, with the rest of the Congress. A lot of the negative outcomes we get now may be the result of having them all in one place, which used to be necessary, but no longer is.