The Great Presidential Stakes turns into a trillion-dollar handicap

The man who got it right, in his way, was Al Gore. Quoting Al Jolson, he promised the voters: ‘You ain’t seen nothin’ yet.’ This was his message four years ago, when I was in New York, leaning over the rails to watch the two runners in the Great Presidential Stakes as they neared the line — then, as now, neck and neck. In those distant days, money was rolling in to the Treasury, and the candidates were competing to spend it. George Bush I had raised taxes and lost an election, so George Bush II was in favour of cutting them. Al Gore said that the age of prosperity was only just starting. I thought that was asking too much. The economy, I said, had taken us all for a long and enjoyable ride on the cycle, but now it was wobbling, and as cycles went it looked more like a cart-propelled horse, pushed forward by the stock market, which peaked a month later. As for the embarrassment of the Treasury’s riches — the national debt, we were seriously told, was on course for extinction — that never looked like a problem beyond the wit of modern governments. Awarded the race by a controversial decision in the stewards’ room, Mr Bush has never since met a spending plan he disliked enough to veto it, and he has proved himself a tax-cutter for all seasons. In good times, so he thinks, cuts are affordable, and in bad times, cuts are the remedy. This has enabled him to preside with indifference over the decline of his country’s finances, and although, as Adam Smith said, there is a deal of ruin in a nation, reversing the process requires an effort of will. That will be the task for this year’s winner of the Great Presidential Stakes.