Until now, I have tried to give Obama the benefit of the doubt. But there isn’t any polite way to put it: he is lying to the American people about his own budget. Whether this is shocking or not depends, I guess, on how closely you have followed the Obama administration. Why is Obama lying? It is the less important part of a two-part strategy.

In short, the more we have learned about what is in this new law, the more it looks like bad news for American taxpayers, businesses, health-care providers, and patients.

The country is in trouble. Continuing to spend 25% of GDP through the federal government is not good for children or other living things. Continuing to spend more than $1.5 trillion than we take in via taxes is another mistake. Do what you can to slow down the gravy train for the few at the expense of the many. Do what you can even if it’s a little. Speak to your friends and neighbors and family. Call or write a politician. Do something.

Every time a budget wonk says “health care costs,” you should say to yourself “utilization of medical services.” That way, the phrase “we need to slow the growth of health care costs” becomes “we need to slow the growth of utilization of medical services,” which is a much more accurate description of what has to occur.

Let’s get back to basic truths. When you’re in a hole, stop digging. Stop running deficits of over 1.5 trillion dollars. Act like grownups and get your fiscal house in order. Stop spending 25% of what we produce. Stop wasting my money and giving it to your friends. Stop passing legislation that makes it hard to figure out what the rules of the game are going to be. Get out of the way. Make government smaller and give us a chance to do what comes naturally—seeking ways to make profit, avoid loss and work together. That is the only sustainable path to prosperity.

Here’s a thought experiment. Imagine that I tell you 100 things that you may not do tomorrow. For example, you cannot run on a treadmill, eat broccoli, buy a car, and 97 other things. While your liberty would be restricted, there would still be an infinite number of things you may still do.
Now suppose I tell you 100 things that you must do tomorrow. You must run on a treadmill, eat broccoli, buy a car, and 97 other things. These 100 mandates could potentially occupy all your time and consume all your financial resources.

This illustrates a challenge facing economists: should they advocate first best or second best policy? I once saw an exchange between a Bush treasury official and a prominent academic critic of TARP, etc. The official argued that the critics were putting forward “solutions” which had no hope of passing congress. The critic sharply rejoindered that it wasn’t his job to suggest stupid things that politicians were willing to do; it was to tell them the right thing to do. This is true–but at some level, there’s no point in spending a lot of time designing policies which can’t be enacted in any conceivable democratic polity. Especially if advocating those policies make it hard to advocate things that might work–either because the advocacy takes time away from thinking about feasible solutions, or because you alienate the people you are trying to influence.

This essay considered the question: why are scoundrels successful in the political arena? Analyzing the nature of an election provides us with an answer. In order to win an election, candidates need to offer their supporters other people’s wealth, and candidates must convince their supporters to vote in spite of the fact that individual votes will not affect the election. Accomplishing these two goals requires deception. Therefore, candidates who are willing to violate property rights — to steal — and be deceptive have an advantage over candidates with stronger moral convictions. So of course elected officials are corrupt. Candidates with moral integrity are at a severe disadvantage in the political sphere. Do not put your hope in political solutions.