Posted by Richard on October 17, 2008
John Samples at Cato@Liberty looked at public opinion trends regarding government spending and saw reasons for limited-government advocates to be optimistic even if Obama wins:
If history is any guide, Obama will not have as much public support for more spending as Clinton or LBJ and such support as he has will begin to decline almost immediately after he takes power.
One can only hope.
And the same trend might come in handy if McCain wins, too.
HT: Booker Rising
Posted in Uncategorized | Tagged: economics, fiscal policy, government, obama, public opinion, spending | Leave a Comment »
Posted by Richard on September 30, 2008
Barack Obama has promised to give the "middle class" a tax cut in the form of a $1,000 check. And he's redefined "middle class" to mean 95% of Americans. Ken Blackwell dissected Obama's "tax cut" and explained what he's really promising:
The statistics speak for themselves. Only 62 percent of Americans pay federal income tax, meaning that 38 percent get a 100 percent refund of any taxes withheld. So Mr. Obama's 95 percent that will receive money from the government includes roughly 33 percent of Americans who pay no income tax. One-third of Americans pay no income taxes yet would receive a government check of perhaps $1,000 or more.
That is pure income redistribution. Some pundits argue that this is Keynesian demand-side economics. It is not. Having the government take money from business entities or affluent individuals and giving it to those who pay no federal income taxes is not Keynesian. It's Marxist.
…
Businesses and corporations do not pay taxes; we do. Businesses don't have huge piles of money sitting in the closet that they simply turn over to government when taxes increase. For every dollar that you increase taxes on a business, they simply increase their prices by a dollar. Who then pays the tax? We do. We do, when the product that we bought last week for $20 suddenly costs $21.
Mr. Obama's plan for universal health care and increased spending on just about everything costs hundreds of billions of dollars. To keep his promises to provide those things while eliminating the deficit and giving checks to lower-income families, he will have to raise taxes by hundreds of billions of dollars. But if lower-income Americans receive a check for $1,000 under the Obama plan yet have to pay $2,000 more when buying food and clothes, they are worse off.
RTWT.
Posted in Uncategorized | Tagged: economics, fiscal policy, obama, taxes | 2 Comments »
Posted by Richard on December 20, 2007
First the bad news: the Democratic leadership in Congress is more socialist, more dedicated to expanding government, more spendthrift, and more crazy than ever. Now the good news: they're also less bright and less competent.
On issue after issue, they've apparently been outmaneuvered by a relatively small number of principled, limited-government Republicans (with limited support from their leadership) and forced to back down on several issues by a lame-duck president who suddenly (six years late) found the cojones to exercise his veto and make at least some effort to exercise fiscal discipline.
Martin Kady II and Ryan Grim have a pretty good analysis at Politico of what's been going on and who caved on what. One of the really hopeful signs (from my perspective) for the future is that Democrats are starting to fight amongst themselves, as the more hard-core leftists and various special interests become increasingly frustrated at their party's lack of "progress."
Between Democrats' growing disunity and the slightly greater amount of backbone (and diminished proclivity for corruption) exhibited by Republicans when they're in the minority, we may be in for a truly wonderful level of gridlock, where not much legislating — and harm to the country — gets done.
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Posted by Richard on November 7, 2007
Monday, the Club for Growth released its 2007 Senate RePORK Card, a scorecard of senators' votes on 15 anti-pork amendments (the House RePORK Card was released back in August). Here's all you really need to know about how sorry the Senate is: only 2 of the 15 anti-pork amendments passed, one to kill a spinach-growers' subsidy included in an Iraq war funding bill, and the other to kill Sen. Clinton's $1 million grant for a Woodstock Festival museum.
Nonetheless, some of the scores are interesting:
The House, meanwhile, voted last night to override the President's veto of the pork-laden Water Resources Development Act and to approve the conference report of a monstrous omnibus spending bill. The Labor-HHS-Military-VA conference report not only includes earmarks "airdropped" into the bill without a vote by either chamber, it also includes a Democratic amendment to gut an earlier reform that prohibited "backdoor" earmarks. The veto override vote was 361-54, so most Republicans abandoned their President to protect their pork.
In fact, 42 Republicans sided with Pelosi on both votes. The'yre listed here. The Club for Growth will undoubtedly support primary opponents for some of these people; if you value fiscal responsibility, you might consider helping them.
Posted in Uncategorized | Tagged: corruption, democrats, fiscal policy, legislation, politics, pork, republicans, rinos | Leave a Comment »
Posted by Richard on February 23, 2007
The National Taxpayers Union has released its Congressional fiscal ratings for 2006, and the report cards are once again dominated by Ds and Fs. Only 61 Senators and Representatives earned an A (that’s actually up from 2005), while 224 earned an F.
Mind you, NTU’s grading scale is pretty lenient (they grade on the curve and they’re dealing with chronic under-achievers, so it has to be): the minimum for an A is 84% in the Senate and just 70% in the House; the thresholds for an F are at 24% and 23%, respectively. Nonetheless, NTU is justifiably proud of their ratings, now in their 28th year (emphasis added):
Unlike those of other organizations, NTU’s annual Rating does not simplistically focus on only a handful of equally-weighted “key votes.” For this reason, it has received praise from lawmakers on both sides of the aisle, including former Senator (and “Golden Fleece Award” creator) William Proxmire (D-WI). The Rating is based on every roll call vote affecting fiscal policy (199 House and 109 Senate votes for 2006), and assigns a “Taxpayer Score” to each Member of Congress that indicates his or her commitment to reducing or controlling federal spending, taxes, debt, and regulation.
The House had an average score of 39% (down 1% from 2005), giving the 109th Congress the poorest 2-year performance in 15 years. The Senate managed to hit 48%, a 4% increase from 2005, but still below 50% for the 9th year in a row. Despite the dismal averages, taxpayers still have a few good friends in Congress:
The top scorer in the House of Representatives was Arizona Republican Jeff Flake with a 92 percent rating. This is the fourth consecutive year Flake has captured the prize, a feat not exceeded in the House since Ron Paul (R-TX) racked up six first-place finishes in a row (1979-1984). South Carolina Republican Jim DeMint made his first appearance in the Senate’s winner’s circle, also at 92 percent. Bringing up the rear with the worst scores in the House and Senate were Dale Kildee (D-MI) and Tom Harkin (D-IA), with scores of 7 percent and 9 percent, respectively. Neither has ranked at the bottom before.
The Democrats and their PR arm, the MSM, have been claiming that their gains last November represented a repudiation of Bush on foreign policy, national security policy, and Iraq (even though they gained seats mainly by running more hawkish, centrist candidates). As I noted in November, the relentlessly bad news from Iraq was certainly a factor, but not the primary reason for Republican losses:
For sure, the Republicans’ wounds were largely self-inflicted. After 2002, Hastert dismantled the Contract with America’s ethics and accountability rules, and the Republicans became arrogant, fat, and lazy. They governed like Democrats, and the American people rejected that, as they usually do. Meanwhile, the Democrats recruited a bunch of candidates who sounded like Republicans, and the American people elected them.
I pointed out then how well Club for Growth candidates did. Now, the NTU has confirmed that fiscal responsibility — more precisely, lack thereof — was a big factor in Republican election losses:
According to Berthoud, the 2006 Rating results strongly indicate that Republican lawmakers who changed their voting patterns (and earned lower pro-taxpayer scores) tended to fare worse at the polls than those who continued their records of supporting limited government. Just two of the 22 House GOP incumbents who lost their seats in 2006 were “Taxpayers’ Friends,” while the remainder posted an average score of 52 percent – well below the overall GOP average of 60 percent.
Can you guess in what year Congress got the highest marks from the NTU? It was 1995 — the year of the Contract with America, when reform-minded, limited-government Republicans took over the House with broad support from the American people. If Tom DeLay, Dennis Hastert, and their cronies hadn’t gotten arrogant and smug, hadn’t discarded the Gingrich Revolution reforms, hadn’t forgotten that they need to at least credibly pretend to work for limited government and fiscal responsibility, the 2006 elections might have turned out quite differently.
One of NTU’s A-rated Friends of the Taxpayer, Rep. Ron Paul, is "exploring" a run for the Republican presidential nomination. I like almost everything about Paul except his blindness to the threat of Islamofascism (like most libertarians, he ignores the fact that they’re waging war on us, whether we choose to fight back or not). On fiscal and regulatory matters, he’s outstanding. Maybe he can help remind Republicans what they ought to represent — the principles of limited government and fiscal responsibility that have brought them success in the past.
Posted in Uncategorized | Tagged: congress, fiscal policy, politics | 1 Comment »
Posted by Richard on July 26, 2006
A couple of weeks ago, I demolished (IMHO) a NYTimes editorial bad-mouthing the economy. In that post, I argued that the Bush tax cuts performed exactly as supply-siders had predicted they would, and that the result was great for the economy. Tuesday, in an OpinionJournal column, Pete du Pont echoed much of what I’d said.
Du Pont began by noting that the Democratic Party has changed a lot since JFK said, "an economy hampered by restrictive tax rates will never produce enough revenue to balance our budget, just as it will never produce enough jobs or enough profits," and 80% of Congressional Democrats voted for the Kennedy tax cuts:
Opposing tax cuts has become the mantra of the liberal left. Sen. John Kerry wants to roll back Bush’s "unaffordable tax cuts." Senator Mark Dayton (D., Minn.) called the cuts "dangerous and destructive and dishonorable." Bill Clinton in 2003 said the cuts were "way too big to avoid serious harm." And various New York Times editorials called them "economically unsound," claimed that "they will increase the deficit by hundreds of billions of dollars" and said they were unlikely "to stimulate the wallowing economy." Earlier this month House Minority Leader Nancy Pelosi promised that the election of a Democratic House in November would result in a "rollback of the tax cuts."
Of course they have it backwards. President Bush’s personal income, capital gains and dividend tax rate reductions have created economic growth, significantly increased government tax receipts, and reduced the federal deficit by nearly $130 billion. …
Du Pont credited Larry Kudlow with pointing out that the U.S. economic growth of 20% — $2.2 trillion — in the past 3 years was the equivalent of adding a whole new China. I noted that factoid in my post Saturday about Nicholas Vardy’s observations regarding U.S. economic performance — six of the ten fastest-growing economies in the world are U.S. states.
DuPont poured out a plethora of positive economic statistics:
In the 2 1/4 years before the 2003 tax cuts, economic growth averaged 1.1% annually; in the three years since it has averaged 4% per year, and in the first quarter of this year it was 5.6% on an annualized basis. Inflation-adjusted per capita GDP has grown 7.8% from 2003 through the first quarter of this year.
According to the government’s establishment survey, in the 36 months since the tax cuts became law, 5.3 million new jobs have been added to the economy. … The unemployment rate dropped from 6.1% when the bills were signed to 5.4% at the end of 2004 and 4.6% today, and the rate has gone down for men, women, blacks and Hispanics. Hourly wage rates for workers are up 3.9% in the past year, and they increased at an annualized rate of 4.6% in the second quarter of this year, the highest quarterly rate in nearly 10 years.
Incomes are up too. As Stephen Moore noted in The Wall Street Journal, "the percentage of Americans earning more than $50,000 a year rose from 40.8% to 44.2%" between 2002 and 2004. As for very wealthy families, the portion of total income "captured by the richest 1%, 5% and 10% of Americans is lower today than in the last year of the Clinton administration."
All this has been good news for the government. Federal tax receipts increased by 15%– $274 billion–last year and 13%– $206 billion–in the first nine months of this fiscal year, which, as the Journal points out, means the nine-month increases for the past two years represent the highest growth rates in 25 years. …
Reducing the capital gains tax rate from 20% to 15% increased capital gains tax receipts by 79% from 2000 to 2004. Cutting the dividend tax rate by more than half–from 39.6% to 15%–increased dividend tax receipts by 35% from 2002 to 2004. And corporate tax receipts have nearly tripled since 2003, reaching $250 billion for the past nine months, 26% higher than the same period last year.
Du Pont’s conclusion? The same as mine:
Tax cuts work, and work well, for individuals, employers and even the government, which sees its revenues increase dramatically when tax cuts are enacted and left in place over time.
Being fair, however, du Pont noted that the Bush administration — and especially the Republican Congress — deserve criticism as well as praise:
The other side of the coin is the government spending rate, for it has grown by more than $800 billion–nearly 50%–during the Bush administration. Excluding war and homeland security expenditures, it has grown about 7% a year, and virtually nothing has been done to stem it.
A veto or two by the president would help, and so would some spine in the Republican House and Senate. A recent National Taxpayers Union Foundation study found that in 2005 the average Republican House member voted to increase discretionary spending by $168 billion, close to the average Democrat’s $178 billion. Republicans senators’ votes averaged $183 billion in new spending; Democratic senators $217 billion. Compare these numbers to the golden days of the Gingrich leadership: In 1997 the average House member voted to reduce spending by $6 billion while the average senator’s increase was only $4 billion.
That’s an astonishing change for the worse among Congressional Republicans.
I think the Democrats are partly to blame, though. If they hadn’t gone so moonbatty and untrustworthy on the critical issue of national security, the Republicans wouldn’t have defied history with congressional gains in 2002. It was their smashing success in those off-year elections that made Republicans smug and arrogant. They subsequently abandoned most of the reforms of 1994, and they moved sharply left-ward on fiscal matters. They assumed that the fiscally conservative part of the base would be more afraid of Democrats than angry at Republicans.
Damn, I wish we had a responsible opposition party.
Posted in Uncategorized | Tagged: economics, fiscal policy, growth, spending, taxes | Leave a Comment »
Posted by Richard on July 22, 2006
Nicholas Vardy, who makes his living offering global investing advice, took a break from discussing opportunities in China, India, Brazil, etc., to talk about what’s happening right here in the U.S.A., and why. In his latest email newsletter, he wrote:
The next time you hear a mind-numbing statistic about China, remember this: the U.S. economy has increased in size by $2.2 trillion just since June 2003. That’s the equivalent of a whole new China in just 36 short months. China and India are economic juggernauts to be reckoned with in the future. But it’s also time to give the U.S. economic tigers — the fast growing regional states — their due.
…… The most dynamic growth economies on the planet are right under your nose. Last year, Arizona’s economy grew 8.7%. That’s just under the 9.3% of China, but above the 8.3% in India. Just behind India was Nevada with 8.2% and Florida with 7.8%. All this, with the headwind of an Iraq war that cost $300 billion and the $40 billion+ damage inflicted by Hurricane Katrina.
If each U.S. state were a country, they would occupy 6 of the top 10 growth positions in the global economy. …
Vardy pointed out that this is truly remarkable because it’s far easier to achieve such growth in a relatively poor, underdeveloped economy:
… But Chinese-style growth rates occurring in the heart of the most advanced economy in the world is virtually unprecedented.
How do the world’s other large economies compare? Last year, Japan, the world’s second-largest economy, emerging from 15 years of stagnation, grew at 1.2%. Ditto Germany; the world’s biggest exporter grew at 1.2%. Europe’s most market-oriented economy, the U.K., grew at 1.8%, while cross-channel rival France grew by 1.4%. This, in a year where global growth had never been stronger.
So, what explains the dramatic difference? I discussed this recently while taking the NYTimes to task. Vardy knows:
Yes, Americans are pragmatic, entrepreneurial and work hard. But the right policy mix also matters. There are many examples in the world — Ireland, the former Communist countries of "New Europe", Chile, and Israel — where the right policies have kickstarted otherwise moribund economies.
Tax policy is crucial, no matter which country, whether rich or poor. With dollars flowing into the U.S. Treasury up 11% this year — twice the White House’s original forecasts — it turns out the supply-siders were right. Tax cuts spur economic activity, widen the tax base, and stimulate the rising tide that lifts all boats. And what do the fastest growing U.S. tigers — Nevada, Arizona, and Florida have in common? No state taxes. …
He means no state income taxes — they rely on sales (consumption) taxes for much of their revenue. The fastest-growing states — and countries — also tend to have lower taxes overall, less red tape, and fewer regulatory barriers.
Of course, moribund, low-growth countries like France and Germany (or at least, their electoral majorities) have pretty much consciously chosen to sacrifice wealth creation in order to pursue other goals — more leisure, lots of "free" government services (many of which subsidize irresponsibility and bad choices), discouraging "too much" innovation and change (favoring stasis), and punishing "too much" success (promoting egalitarianism). The consequences are predictable and unavoidable.
Posted in Uncategorized | Tagged: economics, fiscal policy, growth, taxes | Leave a Comment »
Posted by Richard on July 12, 2006
President Bush presented a mid-session review of the economy this morning. The New York Times, knowing he’d report a healthy, robust economy and predict a rosy future, pre-empted him (funny how pre-emption is OK in their line of work…) with a churlish, negative, divisive, and profoundly dishonest editorial that begged to be fisked.
OK, then:
The release of the White House midsession budget review is an annual event normally marked by a few wonkish observations and the routine updating of various spreadsheets, not by a full-dress presidential dog-and-pony show. But President Bush plans to preside today, with members of Congress and invited guests in attendance. By all indications, including his own in his weekly radio address last Saturday, he plans to turn this into a celebration — just in time for the fall campaign.
How dare Bush celebrate good news when he should be apologizing for being the most incompetent, evil president ever!
This is proof, if anyone still needs it, that this administration is desperate for something to boast about. On Mr. Bush’s watch, triple-digit budget surpluses have turned into annual triple-digit budget deficits. There’s no information in the midsession report to alter that utterly dispiriting fact. Yes, the report is expected to project that this year’s deficit will be somewhat less gargantuan than last year’s — probably somewhere between $280 billion and $300 billion, versus a $318 billion shortfall in 2005. That’s not much to crow about.
“On Mr. Bush’s watch” means the Times starts the clock on Jan. 20, 2001, so it can blame Bush for the 2001-2002 recession. Sorry, but anyone with a lick of economic sense knows that — to the extent federal policies control whether the economy grows or shrinks — there’s a significant lag time. The stage was set — and the downturn began — on Clinton’s watch.
Furthermore, would it be rude of me to remind the Times of an incident that took place later in 2001 a short distance south from it at the tip of Manhattan Island?
But Mr. Bush is likely to gloat, anyway. Earlier this year, the administration conveniently projected a highly inflated deficit of $423 billion. With that as a starting point, the actual results can be spun to look as if they’re worth cheering.
And with Bush’s inauguration as a starting point, the results can be spun to look as if they deserve criticism. But, Bush can reasonably be held accountable only for what happened after mid-2002, when the first tax cuts — the cornerstone of the Bush economic plan — went into effect. By any measure, the results since then have indeed been worth cheering.
As for the deficit, forget the projections — look at the actual numbers. The deficit dropped from 4.5% of GDP ($450 billion) in FY2004 to 2.3% ($296 billion) in FY2006. OMB is forecasting 1.3% ($188 billion) in 2008. Others are more optimistic, seeing a balanced budget in October 2008 (early FY2009) if current revenue and spending trends continue.
The razzle-dazzle won’t end there. As he did in his remarks on Saturday, Mr. Bush is sure to use today’s event to credit tax cuts for a projected “surge” in tax revenue. The Treasury is expected to take in about $250 billion more in 2006 than in 2005, for a total take of $2.4 trillion. Devoid of context, the number looks impressive.
Tax receipts grew 14.5% in 2005, the largest increase in 24 years. Receipts are up almost 35% since the full implementation of the tax cuts in 2003. They’re projected to grow another 11% this year. Given those astonishing numbers, it takes a lot of nerve to put scare quotes around “surge” or dishonestly add the qualifier "projected."
In fact, it is $100 billion less than the $2.5 trillion revenue estimate the administration touted when it set out in 2001 to sell its policy of never-ending tax cuts. …
Let me get this straight: In early 2001 (before an attack worse than Pearl Harbor awoke us to the fact that we’re at war), the administration forecast that their tax cuts would grow revenues from $1.9 to $2.5 trillion, and it turns out they missed by $100 billion — revenues only grew to $2.4 trillion. The Times, as I recall, insisted back then that the proposed tax cuts would seriously diminish revenues. And now, it has the nerve to sneer at the Bush administration’s prognosticating abilities?
… Even with this year’s bigger haul, real revenue growth during the Bush years will be abysmal, averaging about 0.3 percent per capita, versus an average of nearly 10 percent in all previous post-World War II business cycles. …
I’m not sure I believe those numbers. In any case, the Times is still counting from Bush’s inauguration so it can saddle him with an inherited recession and the consequences of 9/11.
…That might be excusable if the recent revenue improvements could reasonably be expected to continue. They cannot. Much of the increase in tax receipts is from corporate profits, high-income investors and super high-earning executives, sources that are just as unpredictable as the financial markets to which they’re inevitably linked.
Well, at least the Times admitted that those increased tax receipts came from corporations and the wealthy. Unpredictable? Can’t be expected to continue? For people who rely on Paul Krugman’s economic insights, I suppose that’s true.
Many of us had no trouble at all predicting that tax rate cuts, especially deep cuts in capital gains and dividend taxes, would stimulate economic growth, corporate profits, and those “unpredictable” financial markets, thus leading to higher tax receipts. They always have, and they always will.
So, the revenue surge is neither a sign that the tax cuts are working nor of sustainable economic growth. …
So, it’s just a random, unpredictable event? Sigh. At least this time the scare quotes are gone.
…A growing number of economists, most prominently from the Congressional Budget Office, point out that upsurges in revenue are also the result of growing income inequality in the United States, an observation that is consistent with mounting evidence of a rapidly widening gap between the rich and everyone else. As corporations and high- income Americans claim ever more of the economic pie, revenues rise, even if there’s no increase in overall economic growth.
Ah, the Left’s trump card, class envy, combined with a flat-out lie about economic growth. Annual GDP growth since 2003 has been 4.0%, well above the average since WWII of 3.4%. Since full implementation of the tax cuts in 2003, over 5 million jobs have been created, pushing the unemployment rate down to 4.6%, lower than the average for any of the previous 4 decades.
If Mr. Bush looked behind his headline numbers, he, too, could see that the rich are getting richer while the rest are, at best, only holding ground. …
Nonsense, we’re all getting richer. If the rich get richer slightly faster than the rest of us, I don’t begrudge them their gains. I’m getting richer because of the new wealth created by the rich — the factories and stores and houses they build and the jobs they create make my gains possible.
…It would make sense to use some of the windfall revenue to enact policies and programs that tilt against growing inequality. Unfortunately, he’s flogging more tax cuts that will deepen the divide.
Windfall revenue? Isn’t this the new revenue that the Times poo-poohed as a trifle in the face of the budget deficits, and assured us couldn’t last anyway? Now they’re ready to spend it on new policies and programs! Why am I not surprised?
Bush is “flogging more tax cuts” that will do exactly what his previous tax cuts did — what tax cuts always do — grow the economy, increase our wealth, and make us all better off. But the Times editorial staff would gladly forego those benefits in exchange for causing pain to the rich. Sad. And sick.
Posted in Uncategorized | Tagged: economics, fiscal policy, spending | 3 Comments »
Posted by Richard on April 13, 2006
Libertarians and fiscal conservatives, myself included, have been complaining about the spendthrifts in both the Bush administration and Congress since "No Child Left Behind," if not longer. When you look at size of the federal budget, the humongous spending growth in category after category, the egregious lists of earmarks and other pork, and the utter failure of the Republicans to exercise even a modicum of self-discipline and restraint, our complaints and criticisms certainly seem well-founded — perhaps even not loud or harsh enough.
Basically, however, I lean toward optimism, so I’m pleased to report that it’s not all doom and gloom on the fiscal front. I ran across some interesting fiscal information that, while it in no way excuses bridges to nowhere, did suggest that the glass may be half full. Possibly more than half full.
Item one was a factoid pointed out by Rush Limbaugh today on his show: As a percentage of gross domestic product (GDP), the federal budget today (about 19%) is significantly smaller than it was in 1984 (over 22%). Of course, 19% is still an absurdly high burden on the economy. But the difference between the two rates is a pretty hefty 15%, so it seems only fair to temper the wailing and gnashing of teeth with a bit of perspective.
Item two is some information about fiscal trends from an interesting blog called The Skeptical Optimist, which is the work of Steve Conover. I learned of it from Dymphna at Gates of Vienna, who justly praised Conover’s Debt Clock, which figures into the fiscal trends information.
Conover’s Debt Clock (top of his right sidebar) contains three counters, not one. The first shows the rapidly growing public debt, and you’ve probably seen one like it — the number updates twice a second, getting bigger at a dizzying rate. The second counter shows the rapidly growing GDP — it, too, is getting bigger at a dizzying rate. The third counter shows the Debt-to-GDP ratio, and Conover points out that waiting for it to change is "worse than watching grass grow." If you’re patient enough, and if current trends continue, you’ll eventually see it inch lower.
But the really interesting fiscal information from Conover is in the post October Surprise, 2008, and its accompanying graph. Conover charted GDP, total federal outlays and receipts, and general fund outlays and receipts, projecting current trends into the future. Subject to two "big ifs," Conover suggested the following possibility:
“Big If” number one:
If federal spending continues to increase at exactly the present rate…
“Big If” number two:
If federal tax receipts continue to increase at exactly the present rate…
Then:
On October 12, 2008, annual spending would become exactly equal to annual tax receipts. In other words, the federal budget would move into balance, three weeks before election day.
The explanation for this potentially fortuitous development is simple: Once again, tax cuts are working exactly as supply-siders predicted. Contrary to the critics, we don’t have to figure out how to "pay for" the Bush tax cuts because they’re more than paying for themselves. GDP and tax receipts are both growing significantly faster than spending, and thus the deficit is shrinking rapidly.
Of course, a balanced budget in 2008 may be good news for the country, but it sure wouldn’t be good news for the Democrats. It thus behooves them to drive spending up and to obstruct all attempts to extend the Bush tax cuts that are the source of the good news.
Fortunately for the Democrats (and unfortunately for the rest of us), they can probably count on considerable help from the (rapidly growing) "useless idiot" wing of the Republican Party — such as Jerry Lewis, Trent Lott, and the usual RINOs. If Rove has any sense, he’ll schedule some hunting trips with Dick Cheney for these folks — maybe send a little message.
Posted in Uncategorized | Tagged: deficit, economics, fiscal policy, spending | 3 Comments »
