Read his lips: some new taxes, if …

Julian Sanchez, an often brilliant but occasionally misguided soul, argues in a recent piece for Reason Online that libertarians — er, fiscal conservatives — ought to jump on the repeal-the-puny-Bush-tax-cuts bandwagon.

If fiscal conservatives want to have any “credibility with liberals and moderates,” Sanchez writes, they ought to strike a Faustian tax-increase-for-budget-cuts deal with “the other side.” Another libertarian, Gene Healy, even dares to contemplate relations with that revenue-enhancement measure.

What Sanchez — who was last seen espousing government-run racial preferences programs — misses is that there is no “other side” that’s serious about reining in spending, not to mention the widespread and far-reaching limits on the scope of federal spending and activity that libertarians have in mind.

As Jim Henley writes, “If we’re going to agree to a distinction between tax cuts and smaller government, and give up the former, we need to make damn sure we get the latter.”

Where’s the Paul Tsongas in the Democratic race for president? Where’s the Paul Simon in the Senate? Heck, even Hillary doesn’t possess Clintonesque rectitude when it comes to deficit reduction.

What’s the Democrats’ major complaint about the hugely irresponsible Medicare prescription-drug entitlement? That it’s not generous enough! What’s the Democrats’ complaint about the No Child Left Behind Act? It’s underfunded! What’s their complaint about the Homeland Security Department? Its employees don’t get inflated labor-union wages and not enough is being spent on security risks such as … sewage plants in North Dakota.

On what planet are these people somehow moderates whom fiscal conservatives ought to be courting with promises of more tax revenues? Radley Balko provides more evidence of liberals’ inherent resistance to spending cuts — of nearly any kind. Maybe there are some more reasonable folks at the Urban Institute, but they’re not the ones currently making policy.

Julian’s essential point that the tax cuts are a short-term illusion that belie the long-term negative economic effects of gigantic budget deficits (as well as the national debt) is of course correct. Balanced budgets are important both for economic reasons and for advocacy reasons, as Julian again correctly points out (“In a world where legislators felt obligated to keep outlays connected by some tenuous thread to revenues, tax cuts would entail smaller government.”)

In the end, like Tyler Cowen, I’d take the deal, but that doesn’t mean we should be pushing for it.

The prescription Julian seems to provide is the path followed by H-Dubya when he was bamboozled by Congress into raising taxes. I can hear the refashioned rallying cry to smaller government now, echoes of Walter Mondale’s 1984 Democratic convention speech.

One of the advantages of being out of power is that libertarians don’t need to make the “sensible compromise.” They can and should, as far as its effective, agitate ceaselessly for smaller government across the board. There’s no need to give any quarter. There are plenty of others actually in power who will do that.

Tim Lee’s suggestion that we try to revive the Balanced Budget Amendment is an excellent one. John Kerry should take his advice, though I suspect that if such an amendment passed, the liberal fetish a la mode for balanced budgets would disappear instantly. But at least then the old debates about the size and scope of government could be argued on a more honest level than now, when both sides pretend we can have our enormous cake and eat it too.

In the meantime, the common perception is still that taxation alone is the cost of government. The dissonance between claiming to advocate smaller government while simultaneously pushing for — or even accepting as a compromise — higher taxes would be jarring to the general public. This proposed grand bargain, if pursued, would not only be a fool’s errand but would seriously undermine the libertarian’s case for smaller government across the board.