I was reading a
recent Paul Krugman column, one of my few (only) pundit heroes. In it, he says the following:
But the real news here is the confirmation that Republicans remain committed to deep voodoo, the claim that cutting taxes actually increases revenues.
It’s not true, of course. Ronald Reagan said that his tax cuts would reduce deficits, then presided over a near-tripling of federal debt.
With all due respect to the good professor, he's changing the topic a little in midstream. The fact that debt exploded under Reagan doesn't disprove the proposition that cutting tax rates can raise tax revenues. It ignores the possibility that spending skyrocketed under Reagan. To be honest, I'm was a little disappointed in Krugman's argument.
Wondering whether this scenario was true , I went searching for data. I still haven't found the answer to my original question, so any data-rich and rhetoric-light links are appreciated.
So what did I find that seemed worth breaking my "blog silence"? Well, I found some interesting links from the Heritage foundation, a well-known conservative think tank. I say interesting, because the data that they faithfully present seems open to interpretation. I give them credit for providing enough data to provide food for both sides of the debate, although I question the time periods they focus on. More on that later.
Here are the links:
Notice anything about these graphs? Here's a few common elements:
- The worst offenses occurred in Bush's second term
- Things have improved a little bit under Obama's watch
- They aren't improving that fast
The upside of that last one (for me and my ilk) is that indexes like these don't really represent
the things that keep
me up at night. I'm particularly unconcerned by the increase of government spending at this time. I'd like to see both lines quite a bit steeper on that first graph.
Why? Well, I probably default to certain Keynesian positions, but being a layman, I view it in terms that I can relate to. It seems, to me, that debt is something that you want to incur when you are in need, and pay it off when you can afford to. Isn't it considered prudent behavior to save in times of plenty, and then spend those savings in times of need?
Yes, we need to save more in times of plenty. We used to be better at that. Notice how those two lines in the first graph start to converge as you go back in time? But one thing that catches my attention, again in the first graph, is that those lines tend to widen the most under Republican administrations.
This leads me back to the question of why these graphs focused on the time periods in question. My thought is that, by showing the longer historical arc of these graphs, it will:
- Shrink the scale of the gap between spending and revenue
- Show how this upward climb in both is sustainable, as long as we're just a little more thrifty
More on this, and more links, tomorrow...