Krugman: Christie myth of fiscal toughness

There will be two big stars at the Republican National Convention, and neither of them will be Mitt Romney. One will, of course, be Paul Ryan, Romney's running mate. The other will be Chris Christie, the governor of New Jersey, who will give the keynote address. And while the two men could hardly look or sound more different, they are brothers under the skin.

How so? Both have carefully cultivated public images as tough, fiscally responsible guys willing to make hard choices. And both public images are completely false.

I've written a lot lately deconstructing the Ryan myth, so let me turn today to Christie.

When Christie took office in January 2010, New Jersey — like many other states — was in dire fiscal straits thanks to the effects of a depressed economy. Unlike the federal government, states are required by their constitutions to run more or less balanced budgets every year (although there is room for accounting gimmicks), so like other governors, Christie was forced to engage in belt-tightening.

So far so normal: While Christie has made a lot of noise about his tough budget choices, other governors have done much the same. Nor has he eschewed budget gimmicks: Like earlier New Jersey governors, Christie has closed budget gaps in part by deferring required contributions to state pension funds, which is in effect a form of borrowing against the future, and he has also sought to paper over budget gaps by diverting money from places like the Transportation Trust Fund.

If there is a distinctive feature to New Jersey's belt-tightening under Christie, it is its curiously selective nature. The governor was willing to cancel the desperately needed project to build another rail tunnel linking the state to Manhattan, but has invested state funds in a megamall in the Meadowlands and a casino in Atlantic City.

Also, while much of his program involves spending cuts, he has effectively raised taxes on low-income workers and homeowners by slashing tax credits. But he vetoed a temporary surcharge on millionaires while refusing to raise the state's gasoline tax, which is the third-lowest in America and far below tax rates in neighboring states. Only some people, it seems, are expected to make sacrifices.

But as I said, Christie talks a good (and very loud) game about his willingness to make tough choices, making big claims about spending cuts — claims, by the way, that PolitiFact has unequivocally declared false. And for the past year he has been touting what he claims is the result of those tough choices: the "Jersey comeback," the supposed recovery of his state's economy.

Strange to say, however, Christie has told reporters that he won't use the term "Jersey comeback" in his keynote address. And it's not hard to see why: the comeback, such as it was, has hit the skids. Indeed, the latest figures show his state with the fourth-highest unemployment rate in the nation. Strikingly, New Jersey's 9.8 percent unemployment rate is now significantly higher than the unemployment rate in long-suffering Michigan, which has had a true comeback thanks to the GOP-opposed auto bailout.

Now, state governors don't actually have much impact on short-run economic performance, so the skidding New Jersey economy isn't really Christie's fault. Still, he was the one who chose to make it an issue. And even more important, he's still pushing the policies the state's recovery was supposed to justify.

You see, all that boasting about the Jersey comeback wasn't just big talk (although it was that, too). It was, instead, supposed to demonstrate that good times were back, revenue was on the upswing, and it was now time for what Christie really wants: a major cut in income taxes.

Even if the comeback were real, this would be a highly dubious idea. By all accounts, New Jersey still has a significant structural deficit, that is, a deficit that will persist even when the economy recovers. Furthermore, the Christie tax-cut proposal would do very little for the middle class but give large breaks to the wealthy.

But in any case, the good times are by no means back, and neither is the revenue boom that was supposed to justify a tax cut. So has the very responsible Christie accepted the idea of at least delaying his tax-cut plan until the promised revenue gains materialize? Of course not.

Which brings me back to the comparison with Paul Ryan. Ryan, as people finally seem to be realizing, is at heart a fiscal fraud, boasting about his commitment to deficit reduction but actually placing a much higher priority on tax cuts for the wealthy. Christie may have a different personal style, but he's playing the same game.

In other words, meet the new boaster, same as the old boaster. And pray that we won't get fooled again.