A wit once defined a barometer as an ingenious instrument that reveals the kind of weather we are experiencing. If you have no barometer, you can consult the Senate Budget Committee. It, like a barometer, measures climatic pressure.
The committee has rejected the president's budget. That is "rejected" as in: Russia rejected Napoleon. The vote was 17-4 and reflected the fact that among the 535 members of Congress there probably are not 35 who would vote for the president's program of continuing the defense buildup at the pace he prefers, avoiding all tax increases and significantly cutting middle-class domestic programs.
Less than six months ago the president got a mandate to keep on keeping on -- to continue the policies of the first term. That is not surprising. The public rather enjoys getting a dollar of government spending and being charged only 75 cents in taxes. Last week there was a languorous White House discussion about sending the Great Communicator back onto the campaign trail to communicate (as he forgot to do before the election) his zest for all those specific program cuts.
But his aides then thought: He would be campaigning against most Senate Republicans, 40 percent of whom face reelection in 19 months. Reagan would not be able to campaign for a "live legislative vehicle." (Sorry. They talk like that.)
What the Budget Committee approved might bring a blush to the presidential cheeks. It would cut the deficit by more than the president's budget would have done. Furthermore, the committee plan would confound skeptics by freezing Social Security benefits for a year. Of course, all this is in the subjunctive tense because the committee action binds no one. The only thing mandatory is that we pay the interest on the national debt.
The debt, without major policy changes (the likelihood of which has gone from "not very" to "are you kidding?"), will increase about $1 trillion in the next four years. If so, every year for the rest of the history of the republic, taxpayers will pay about $100 billion in interest just on this four-year addition to the debt.
Ronald Reagan is playing Tom Sawyer, who was the quintessential American, which means he was something of a sharpie. Tom, a cunning rascal, grew up about 185 miles west of Dixon, Illinois. Cunning rascals sprout like corn out there.
Not since Tom tricked the other boys into whitewashing Aunt Polly's fence for him has there been anything as nifty as Reagan's way of getting others to do his disagreeable chores. He says to Congress: Here is the division of labor: I'll look after the Marine band, Air Force One and Camp David. You folks cut the social programs.
Sen. Pat Moynihan has a modest proposal for a one-shot cash infusion to trim the deficit without cutting any programs. His idea for slicing a substantial piece off the government's debt is: Sell it. Part of the debt, that is.
By the end of fiscal 1986, the government will have outstanding loans valued at (which does not mean "worth") $280 billion. That is three times the size of the loan portfolio of Citicorp, one of the nation's largest banks. This federal portfolio is scattered around the government and managed by bureaucrats paid less than a Citicorp branch manager.
Many loans are at far less than today's interest rates. Under Moynihan's plan, they would be sold at a discount reflecting their real market value today. Even assuming that the value of the $280 billion in paper is now just, say, $75 billion, that is the real value, no matter who holds the paper, and the government would get a cash infusion of $75 billion.
The loans were made to students, small businesses, large corporations, farmers and many other groups including foreign governments. The point was to let Congress spare those groups the torture of paying market rates for money. But selling the loans to private insitutions would not change the terms. The people owing the money would just send their checks to a different address.
Moynihan's plan has an international dimension because of the doctrine of "comparative advantage." According to that, different nations do different things well and each nation should prosper by swapping goods and services according to its comparative advantage.
Japan, for example, is good at making cars and cameras and television sets and many other things. The United States, too, is gifted at making many things, but it is especially, even incomparably, gifted at making debts.
The Japanese save 20 percent of their wages, about triple the American rate. That is one reason why Japan has between $50 billion and $100 billion sloshing around the world, looking for things to buy. America has debt to sell at a discount. Call that the American advantage, comparatively speaking.