Out of Whose Control
Another day, another ridiculous line from Scott McClellan:
Bush also will continue his calls for Congress to renew the USA Patriot Act and make permanent the 2001 tax cuts, which McClellan said have built the foundation of an economic recovery.
McClellan argued that those tax cuts have brought in more revenue, and he blamed the rising federal deficit -- currently projected at $337 billion -- on "out-of-control spending" by Congress.
There's no serious argument to be made that tax revenue is higher today than it would have been absent the Bush tax cuts. But beyond that, who, exactly, is responsible for this allegedly "out-of-control" spending. Why, that would be the congressional Republicans! But leaving the partisan control of congress out of the picture, the President needs to sign all those spending bills. It's just outrageous for the White House to try and avoid taking responsibility for laws that have been passed with its consent, by its own party, under its watch.
Meanwhile, obviously for any given deficit you could close the deficit either by raising taxes or by cutting spending. But what $337 billion in spending cuts does the White House favor? No more Medicare? Eliminate half the Defense Department?
i, for one, have a serious argument to be made with that. what are you talking about?
there is a legitimate argument that tax revenues aren't as low as they would have been had there not been dynamic effects from the spending of dollars by households with lower tax bills.
there is a legitimate argument that growth would have been lower without that consumer spending (not one i totally buy - i think the keynesian stimulus of deficit spending would have done fine by itself).
but i don't see that there is a legitimate argument that had there been no bush tax cuts, tax revenues would be lower today than they are.
January 31, 2006 1:46 PM | Reply | Permalink
I seem to remember a few years ago working out that if you eliminated every last penny of non-defense discretionary spending, you didn't close the budget deficit. I guess that's still true.
January 31, 2006 2:14 PM | Reply | Permalink
January 31, 2006 2:23 PM | Reply | Permalink
Barbar, now that i look at it again, i guess maybe you're right, but it's, as you say, not matthew's easiest sentence to parse.
January 31, 2006 3:20 PM | Reply | Permalink
How about this idea, The 95% at the bottom, tinker with the non -defense, and the upper 5% group gets taxed for the military. maybe the lower group eliminates those projects it really doesn't need , to bring the budget in line. No more large subsidies, sugar, etc .
The very rich either agree to support defense or they put pressure to control our out of control foreign policy.
Each group, determining what is more important
No more government borrowing without increases in revenue PAYGO.
If the government couldn't borrow
Interest rates would be lower, stimulating growth.
The low interest rates was the key to our boom
January 31, 2006 4:11 PM | Reply | Permalink
Mathew, didn't you once post on Talk Shop? Seems I remember your name from following it. If so, it sounds like you disagree with Jude's faith in tax cuts. Yes or no?
January 31, 2006 4:17 PM | Reply | Permalink
Matt is saying that you can't seriously argue revenues are higher beacuse of tax cuts. He should have said: Arguments that revenues are higher than they would have been without the cuts are not serious.
Eliminating half of Defense' budget sounds good to me. For perspective read this gem from 1992 by Brad DeLong.
January 31, 2006 4:31 PM | Reply | Permalink
Chuckie that idea is beautiful. I am making a copy of it.
Wars benefit the rich and Businesses mostly, so they should pay for them. 911 wouldn't have happened if it hadn't been for our policies overseas which is fostered by the wealthy businesses. The terrorists killed a lot of regular people, but their goal was to destroy the symbol of what those buildings stood for.
The rich also benefit from our schools, highways, police, firemen, airwaves and many other things. Schools turn out people who can read, write, type, compute and do math and these people work for the businesses. So they need to help pay for those too.
January 31, 2006 5:07 PM | Reply | Permalink
I don't buy the tax cuts did all that much. Oil going up took away the small tax breaks many average people received.
There is a lot of profit in war, especially if you get no bid contracts. They were selling plywood in Iraq for $75 a sheet. We had captive customers in the war areas.
Lower interest rates helped a lot.
Money was printed and pumped out at ridiculous rates. The government credit card (the deficit) kept flashing all over the country.
People were encouraged to spend to help fight a recession and to spend the equity in their homes.
If we hadn't had the tax cuts our country would not have the deficit. The Bushites have blown what opportunity we had to get our house in order. The repayment of the boomer's trust fund and the deficit will be hard. That is probably the plan. Starve the beast.
Greenspan has already said that we will have to have massive benefit cuts, in Social Security and Medicare, because of the large deficit, in some speeches about two months ago.
January 31, 2006 5:25 PM | Reply | Permalink