The Economist's Democracy in America blog has an interesting post about a column in The Fiscal Times by Bruce Bartlett, a former Jack Kemp staffer, advisor in the Reagan Administration, and Treasury official under Bush 41.
In talking about Reagan and Bush 43, the The Economist's blog writes:
"...both administrations revved up spending at the same time they were cutting taxes, in the political equivalent of an overweight person who rewards himself with an extra helping of ice cream because he has just purchased a membership in a gym."
The Bartlett column also provides empirical evidence contradicting its counterpoint, that raising taxes results in uncharacteristic increases in government spending:
"By this logic, the tax increase enacted in 1993, which raised the top federal income tax rate to 39.6 percent from 31 percent, should have caused a massive increase in the federal budget deficit. In fact, it did not. Spending was 22.1 percent of GDP in 1992 and it fell every year of the Clinton administration, to 21.4 percent of GDP in 1993, 21 percent in 1994, 20.6 percent in 1995, 20.2 percent in 1996, 19.5 percent in 1997, 19.1 percent in 1998, 18.5 percent in 1999, and 18.2 percent in 2000."
When a staunch Reaganite involved in its fiscal policy is jumping the ship on the economic theory they so dearly espoused, why are today's Republicans still hanging on dearly hoping against hope that they might be proven right this time against all evidence otherwise?
Tuesday, November 30, 2010
Monday, November 29, 2010
Washington Post: Five myths about cutting the deficit
Here’s one passage about #4 that is food for thought to people that think tax cuts can solve any problem with the deficit:
“Budget discipline works only when it is imposed on both sides of the ledger. In 1990 and 1993, the last time we faced a serious fiscal crunch, Congress did just that, slashing spending and raising taxes. In contrast, in 1981 and 2001, massive tax cuts did not lead to reduced spending, despite the hopes of those who espouse the "starve the beast" theory of fiscal reform.
Instead, the tax cuts were accompanied by big increases in spending, thus boosting the deficit from both sides. The logic is clear: If some politicians reward their constituents through tax cuts, other politicians will see no reason that they can't reward their own constituents through more spending. It is only when fiscal discipline is comprehensive and coordinated that it works and endures.”
The five myths about cutting the deficit are:
1. The United States is on the verge of a fiscal crisis.
2. The deficit commissions should propose reforms that are politically viable.
3. Social Security has a surplus, so it shouldn't be cut.
4. We can balance the budget without raising taxes.
5. A new short-term stimulus would be fiscally irresponsible.
Read the whole article to find out why the five myths are actually myths.
“Budget discipline works only when it is imposed on both sides of the ledger. In 1990 and 1993, the last time we faced a serious fiscal crunch, Congress did just that, slashing spending and raising taxes. In contrast, in 1981 and 2001, massive tax cuts did not lead to reduced spending, despite the hopes of those who espouse the "starve the beast" theory of fiscal reform.
Instead, the tax cuts were accompanied by big increases in spending, thus boosting the deficit from both sides. The logic is clear: If some politicians reward their constituents through tax cuts, other politicians will see no reason that they can't reward their own constituents through more spending. It is only when fiscal discipline is comprehensive and coordinated that it works and endures.”
The five myths about cutting the deficit are:
1. The United States is on the verge of a fiscal crisis.
2. The deficit commissions should propose reforms that are politically viable.
3. Social Security has a surplus, so it shouldn't be cut.
4. We can balance the budget without raising taxes.
5. A new short-term stimulus would be fiscally irresponsible.
Read the whole article to find out why the five myths are actually myths.
Friday, November 19, 2010
The REAL Reason the party of Reagan cannot accept the science of climate change
Former Republican Congressman Sherwood Boehlert wrote an interesting op-ed in today's Washington Post about why the Republican Party is eschewing science for political reasons.
I am sympathetic to the author's position that verifiable scientific facts must not be questioned and the only political angle must be the solutions to address them. However, I disagree with him that the climate change skepticism is purely political, especially when we know evangelical fundamentalism is much more rampant in the United States compared to other developed countries. What has happened is the fundamentalism has infected right-wing politics, to the point where we have this joker potentially in line to chair the House Energy Committee, all the while believing that there isn't enough carbon on earth and once stating in a committee hearing:
"...the earth will end only when God declares it's time to be over. Man will not destroy this earth. This earth will not be destroyed by a flood.... I appreciate having panelists here who are men of faith, and we can get into the theological discourse of that position, but I do believe God's word is infallible, unchanging, perfect. Today we have about 388 parts per million in the atmosphere. I think in the age of dinosaurs, when we had the most flora and fauna, we were probably at 4,000 parts per million. There is a theological debate that this is a carbon-starved planet — not too much carbon. And the cost of a cap-and-trade on the poor is now being discovered."
I am sympathetic to the author's position that verifiable scientific facts must not be questioned and the only political angle must be the solutions to address them. However, I disagree with him that the climate change skepticism is purely political, especially when we know evangelical fundamentalism is much more rampant in the United States compared to other developed countries. What has happened is the fundamentalism has infected right-wing politics, to the point where we have this joker potentially in line to chair the House Energy Committee, all the while believing that there isn't enough carbon on earth and once stating in a committee hearing:
"...the earth will end only when God declares it's time to be over. Man will not destroy this earth. This earth will not be destroyed by a flood.... I appreciate having panelists here who are men of faith, and we can get into the theological discourse of that position, but I do believe God's word is infallible, unchanging, perfect. Today we have about 388 parts per million in the atmosphere. I think in the age of dinosaurs, when we had the most flora and fauna, we were probably at 4,000 parts per million. There is a theological debate that this is a carbon-starved planet — not too much carbon. And the cost of a cap-and-trade on the poor is now being discovered."
"There's an App for That" (Trademark Apple Inc.)
Apparently the US Government has a number of apps for the average citizen and one even for international audiences to learn about the US.
International Herald Tribune: Obama Op-Ed Today
President Obama pens an op-ed today in the International Herald Tribune directed at the European reader. Also, did you know the International Herald Tribune is really just the Global Edition of the New York Times?
Thursday, November 18, 2010
That ugly baby is really quite breathtaking.
Sometimes you just have to call the baby ugly rather than make people wonder if you were just being nice by saying it’s breathtaking.
Likewise, Matt Miller talks about our incessant need for reassurance and Nicholas Kristoff talks about how us turning into a banana republic is insulting to banana republics. What is striking about Kristoff’s column is he is typically a foreign affairs columnist that focuses on third world issues more than American politics. That is why this particular paragraph gave me chills to read:
“I’m appalled by our growing wealth gaps because in my travels I see what happens in dysfunctional countries where the rich just don’t care about those below the decks. The result is nations without a social fabric or sense of national unity. Huge concentrations of wealth corrode the soul of any nation.”
Hey America, your progressive income tax rates are really breathtaking.
Likewise, Matt Miller talks about our incessant need for reassurance and Nicholas Kristoff talks about how us turning into a banana republic is insulting to banana republics. What is striking about Kristoff’s column is he is typically a foreign affairs columnist that focuses on third world issues more than American politics. That is why this particular paragraph gave me chills to read:
“I’m appalled by our growing wealth gaps because in my travels I see what happens in dysfunctional countries where the rich just don’t care about those below the decks. The result is nations without a social fabric or sense of national unity. Huge concentrations of wealth corrode the soul of any nation.”
Hey America, your progressive income tax rates are really breathtaking.
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