Rubinomics R.I.P.
If our Washington, D.C., readers noticed a cortege of blue suits carrying a casket in front of the Brookings Institution last week, be not mournful. You were merely watching the leading economists of the Democratic Party burying the faith once known as Rubinomics. May it rest in peace.</br></br>Rubinomics is the concept of "deficit reduction" as growth policy: Lower the federal budget deficit and, as dawn follows night, interest rates will fall and prosperity will break upon the land. Named for former Treasury Secretary Robert Rubin, and much celebrated in the 1990s, the concept was embraced as gospel by nearly all Democrats as recently as a few weeks ago. But last week it officially expired, as those same Democrats reconverted to Keynesian deficit spending in the name of "economic stimulus."</br></br>Mr. Rubin's successor at Treasury, Larry Summers, started the bidding with a $65 billion tax rebate and spending plan. Hillary Clinton saw that and raised, and now wants $40 billion in tax rebates and $70 billion in new spending for unemployment insurance, housing assistance, home heating subsidies and green technologies. Barack Obama joined the fray Sunday, proposing a $75 billion "stimulus" that would have the government send millions of Americans a check for $250, plus another $250 in bonus Social Security payments.</br></br>But wait, what about those evil Bush deficits? Only weeks ago, Democrats claimed those were the road to perdition, even if the deficit had shrunk to 1.2% of GDP last year thanks to booming revenue growth. Remember the imperative of "pay as you go" budgeting? Ah, that was all before Iraq faded as a political winner and the economy became their favorite issue for regaining the White House. Now, all of a sudden, their motto is tax cut and spend.</br></br>"Stimulus shouldn't be paid for," declared Mrs. Clinton on NBC's "Meet the Press" on Sunday. "The stimulus, by the very nature of the economic problems we're facing, is going to require an injection of federal funding." And no less than the oracle himself, Mr. Rubin, appeared at Brookings last week to declare that a deficit-padding stimulus "can give the economy a timely boost in the face of great uncertainty and concern with the short-term economic outlook." The coroner will note that the cause of death here is suicide.