The Washington Post has an article today entitled "Obama Tax Plan Would Balloon Deficit, Analysis Finds."
The key point: while Obama (with indisputable accuracy) denounces Bush's "reckless" economic policies that are "mortgaging our children's future on a mountain of debt," he is himself proposing tax changes that would add $3.4 trillion to the national debt, including interest, by 2018, as compared to present law (which has all those Bush tax cuts expiring after 2010).
So that it won't look so bad, Obama uses Bush's fiscal policy baseline, in which it is assumed that all of the tax cuts will be extended (and various other fiscally adverse policies adopted as well). Under the Bush baseline, Obama offers middle class tax cuts without increasing the national debt. (I.e., he finances his tax cuts by scaling back the ones Bush and McCain want to extend.)
Len Burman puts it well in the Post article: "Obama has criticized Bush for his fiscal irresponsibility, and now he's using Bush's baseline as a yardstick by which to measure fiscal responsibility."
Jason Furman, who is running Obama's economics shop and who obviously understands all this, defends using the Bush baseline as part of drawing a clear distinction with McCain, who plans to go way beyond the insane Bush baseline and add more than $5 trillion to the national debt over the next ten years.
And this in turn helps to show why the U.S. political and fiscal system are in such bad shape. As things stand, Obama is proposing unsustainable tax cuts (relative to the present law baseline). Yet he is being (a) trillions of dollars less irresponsible than McCain, and (b) attacked by the McCain campaign, based on repeated and shameless lies, as someone who is proposing to increase people's taxes. (The ads about the tax increase for people earning $42,000, recently exposed by independent fact checkers as having "multiple false and misleading claims," are simply par for the course.) So I'd have to agree that, with the bogus baseline and unsustainable tax cuts, Obama is nonetheless being about as fiscally responsible as it is politically feasible to be in a closely contested presidential campaign.
Gresham's law applies to baselines as well as money - the bad ones drive out the good. In the soundbite world of contemporary politics, you simply can't hold yourself to a more reasonable baseline and then try to explain the difference. No one understands, and no one cares.
This is why we are headed off a cliff - not because the fiscal situation is so bad (although it ain't good), but rather because the contemporary political environment makes rational problem-solving impossible.
And our system's pervasive and growing political failure is not limited to budgetary politics. Think gas prices and the McCain campaign's wildly dishonest use of the drilling "issue."
Not to sound old-fashioned, but to me our country's most serious problem is the decline of civic virtue, mainly on the right (where for many it's been replaced by Leninist ethics). The press and the public can't monitor Rove-style dishonesty and resulting destruction of rational dialogue about problems - you need people on each side who are reciprocally willing to limit it through a kind of cooperative quid pro quo. Instead we get chicken games that may end like the one in Rebel Without a Cause (only it will be the audience that goes off the cliff, not one of the drivers).