Tuesday, January 19, 2010

Fiscal Infantilism

My major beef against the GOP is that it is the major purveyor of fiscal infantilism in our country. What's the standard line?

"Obama has run up a $1.2 trillion deficit! We need to cut spending to bring down that deficit, and cut taxes to get our economy going again."

But won't cutting taxes hurt our deficit?

"No! Cutting taxes pays for itself by spurring the economy."

Even among conservative economists, the only ones who believe this last claim are hacks like Larry Kudlow who are willing to deceive themselves on the historical evidence. Look at this graph:

The Republican tax cuts of the early 80s and early aughts both raised the deficit, even as a percentage of GDP. Reputable conservative economists like Gregory Mankiw readily admit that tax cuts cost money.

But for the sake of argument, let's imagine unicorns exist and tax cuts pay for themselves. Can we balance the budget by spending cuts alone? Well, how much is the deficit projected to be next year again? $1.258 trillion. And how much is discretionary spending for next year, including defense? $1.250 trillion. You could literally cut ALL of government except for Medicare and Social Security and still not be able to balance the budget. (And of course, we know from the current health care debate that Republicans would NEVER cut Medicare spending.)

The smart conservatives all know that they can't make these promises and be fiscally responsible, but they wink at each other and say "hey, tax cuts have been pretty good for getting us elected in the last 30 years. Why change a winning formula?"

Because you can't govern responsibly by getting elected on this platform.

And why do the talking heads, who often profess to be intensely concerned with matters of fiscal rectitude, why are they unable to ask a Republican a tough follow-up when they propose mathematically impossible remedies for our country's problems?

Honest disagreements are possible in politics, but this is surely a question of character. The numbers are inescapable. If a politician is willing to run on the standard Republican platform, he is either a stone-cold idiot or someone who cares more about power than their country.

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