In the United States, our political discourse is extraordinarily democratic, and therefore extraordinarily stupid, and the immortality of certain myths — the Social Security “trust fund,” the impact of foreign-aid spending on the federal budget — makes it nearly impossible to discuss the fundamental facts of American government. Here are two phrases that should be struck from our political lexicon, their use designated an occasion for corporal punishment: “Reagan deficits” and “Clinton surpluses.” Presidents do not write the national budget, balanced or otherwise, nor do they create deficits or surpluses. Congress does that, by passing tax bills and appropriations bills. There were no Reagan deficits, nor were there Clinton surpluses: There were Tip O’Neill deficits and Newt Gingrich surpluses.
The governors in the Republican presidential field all can boast of having worked with legislatures to achieve balanced budgets. Rick Perry and Jon Huntsman can boast of having done so in situations that replicate in miniature the national fiscal picture — locked-in spending outpacing tax revenues reduced by recession and subsequent slow growth — but with an important difference: Unlike the federal government, states and cities do not really have much choice but to balance their budgets. It is a lucky thing that this is so, and one that bears further consideration: Most of our states and cities operate under legal prohibitions against operating deficits, but the federal example suggests that restraints on borrowing are easily set aside, and many of our states and cities have excellent credit ratings that would enable them to borrow at attractive rates. The real constraint here seems to be an informal norm against states’ and cities’ borrowing to finance regular operating deficits, even though they do borrow large sums for capital projects.