Being Fiscally Conservative Means Having to Raise Taxes. Sometimes.
Republicans are upset about all the spending going on under President Obama. In someways, they should be concerned about all this.
But then, if GOP leaders are upset, then they need to look at themselves first before they start accusing the Democrats.
New York Times writer David Leonhardt, does a good job of showing how the rising tide of red ink flowing from Washington will harm the economy. But he is willing to show us that the red ink didn’t start with Mr. Obama:
The story of today’s deficits starts in January 2001, as President Bill Clinton was leaving office. The Congressional Budget Office estimated then that the government would run an average annual surplus of more than $800 billion a year from 2009 to 2012. Today, the government is expected to run a $1.2 trillion annual deficit in those years.
So, how did we get here? Leonhardt explains:
The first category — the business cycle — accounts for 37 percent of the $2 trillion swing. It’s a reflection of the fact that both the 2001 recession and the current one reduced tax revenue, required more spending on safety-net programs and changed economists’ assumptions about how much in taxes the government would collect in future years.
About 33 percent of the swing stems from new legislation signed by Mr. Bush. That legislation, like his tax cuts and the Medicare prescription drug benefit, not only continue to cost the government but have also increased interest payments on the national debt.
Mr. Obama’s main contribution to the deficit is his extension of several Bush policies, like the Iraq war and tax cuts for households making less than $250,000. Such policies — together with the Wall Street bailout, which was signed by Mr. Bush and supported by Mr. Obama — account for 20 percent of the swing.
About 7 percent comes from the stimulus bill that Mr. Obama signed in February. And only 3 percent comes from Mr. Obama’s agenda on health care, education, energy and other areas.
If the analysis is extended further into the future, well beyond 2012, the Obama agenda accounts for only a slightly higher share of the projected deficits.
So before we start placing blame on Obama or the Dems, we Republicans need an intervention.
We caused this. We are responsible.
The thing is, after going on a bender for eight years, it’s hard to turn around and pretend that we now are serious about keeping the deficit under control. Also, how serious are we if we want to keep the current Bush tax cuts alive?
This isn’t to say that the Dems are innocent in this, it’s just they’ve only been in power for five months. In someways, the Democrats are like the teen that finds out that his supposedly tea-totalling Dad is a royal lush- they’ve decided that if papa ain’t gonna live up his words, then why should they?
The Republicans have to get their fiscal conservative mojo back, but not by saying “never again” and then going on a tax cutting and spending bender.
It will mean that the Republicans will have to go cold turkey and get back on the road of real fiscal conservatism and not the faux conservatism they’ve been on for a while.
Fiscal conservatism means that to keep the budget in line means learning to cut the budget when needed, live within our means, and to get the most of our the taxpayer’s dollar.
Oh yeah, and it means that from time to time, we have to raise taxes.
I know that has become an anathema to Republicans over time. No Republican worth their salt likes raising taxes. The very thought kind of makes our stomach turn. But if we are going to regain the mantle of fiscal responsibility, then we need to find the narrow path.
Republicans used to believe in making government efficient and make sure that the feds can meet obligations without incurring more debt.
Bruce Bartlett, one of the minds behind supply-side economics, has become a bit of an apostate for his willingness to depart from what has become conservative dogma on fiscal issues. He believes that Republicans might want to “be like Ike:”
Historically, Republicans have come back from electoral losses by accepting the fact that Americans mostly like government spending. Rather than make a futile effort to take away something most voters want, Republicans have instead worked to make the welfare state function efficiently, target benefits to those that play by society’s rules and finance those benefits without additional debt.
Thus, when Dwight Eisenhower won the presidency in 1952 with solid Republican majorities in both the House and Senate, he explicitly rejected any attempt to repeal the New Deal. Instead, he pushed efficiency and economy in government and emphasized that its bills needed to be paid. Balancing the budget was Eisenhower’s main concern.
Similarly, Richard Nixon made no effort to roll back the Great Society after he was elected in 1968. Like Eisenhower, he emphasized proper management of government programs and the necessity of financing them even if it meant raising taxes.
Balancing the budget? Proper management? What odd words.
Okay, but Eisenhower and Nixon are even “real” Republicans, some conservative wags will say. Now Ronald Reagan, there’s a man who wouldn’t raise taxes to keep big government up and running!
Well, you’re wrong:
Even Ronald Reagan accepted the permanence of the welfare state and the need to pay for what has been promised to our senior citizens. This is most apparent with the Social Security rescue in 1983, which left benefits virtually untouched but raised taxes sharply to keep the system solvent.
Of course, none of this is sexy and it doesn’t energize the base. Tea parties won’t be held in praise of higher taxes. But actually acting like we mean it when we talk about being good stewards of the public purse might attract independents who do care about these things. It worked in Europe this past weekend where conservative parties won in elections the Europarliament.
The current recession has woken the average American up. After years of living off credit cards, judgement day came to millions. It’s high time for we Republicans to stop spending the nation’s credit card and act like adults.
Crossposted at NeoMugwump
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12 Responses to “Being Fiscally Conservative Means Having to Raise Taxes. Sometimes.”
Not really impressed with the article.
The late Clinton years were an outlier (ironically, preceded by a huge tax cut in 1997). Holding that up as a gold standard of governmental responsibility is a lie. They were flush with cash and didn't have enough time to spend it all. Spending still increased. Spending almost ALWAYS increases and has done so for decades and decades.
No Republican can run on a “I might raise taxes” platform. No Republican can raise taxes during his term and not see a George Bush Sr. backlash the following election. It would be akin to a Democrat running on a platform where they say that services and SSI will be slashed. Never happen.
Which illustrates why it is ridiculous we are saddled with a two party system. Our parties inherently have to lie to us for self-preservation. It's an accepted fact of life.
Not to put to fine a point on it, but most of the European Conservatives with the exception of the Brits are solidly to the left of the Democratic Party as it currently exist.
National debt by U.S. presidential terms
In conclusion, if you elect a Republican into the White House, you should expect the debt to go trough the roof.
An considering the track record of Republicans, I am amazed that they have the balls to criticize anyone on fiscal matters, or to call themselves fiscal conservatives.
Please stop the Republican talking points. Your Messiah, Ronnie Raygun raised taxes. This link from NRO:
http://www.nationalreview.com/nrof_bartlett/bar…
Another source that shyow how Reagan raised taxes:
http://www.washingtonmonthly.com/features/2003/…
Another:
http://www.dailyhowler.com/dh060804.shtml
Good article Dennis, and thanks for the historical reality check Don Q and Rudi. We really need to see through the talking points to a cold, fact based look at the past in order to learn from that past. I've been amazed by the historical revisionism that lets some people lionize the “fiscally conservative” right and demonize the “tax and spend liberals.” The truth is in the numbers. The Dems have been better stewards of the economy as well as better for social issues including education, environment, health care and poverty alleviation.
I agree with you Dennis. I'd say, though, that while raising taxes shouldn't be a “nevernever” (with the inevitable boxing in of options), I think the emphasis should be to first find inefficiencies and duplication. Inefficiencies includes, btw, outdated and/or bloated programs.
Raising taxes should be part of the toolkit, but it shouldn't be the first tool in the hand. Or even the second. In fact, it should be only used if the other tools won't fix the problem.
I agree, Polimom, and what I see as one of the most egregious inefficiencies should be first on the chopping block. It is, however, a key part of the Republican mantra, “privatize, deregulate, cut social spending.” It is that “privatize” part. How cynical and deplorable that while admonishing us to “support our troops” our leaders had so little confidence in our troops that they paid mercenaries $900 a day to perform critical roles that should be performed by our troops. They're good enough. They're better than good enough!
The same goes for disaster relief services, epitomized by the Katrina fiasco. There is absolutely no reason for us to outsource, at greatly elevated cost, services that our own disaster relief agencies are better able to perform. Again, services were privatized, rather than sending in our National Guard and beefing up our own relief agencies.
When we do decide to do something, it's time to act like adults and raise the money to pay for what we want to buy. “Tax-and-spend” has always been a better strategy than “borrow and spend” which has characterized the Republican approach, ever since Reagan.
I continue to believe government it's best results when both parties have enough power to moderate the other. GWB was able to screw things up royally with a GOP Senate and House, I fear Obama will screw things up royally with a Democratic House and Senate.
I read the NYT article yesterday and as I predicted people are taking what they want from it. This quote really sums things up:
“Bush behaved incredibly irresponsibly for eight years. On the one hand, it might seem unfair for people to blame Obama for not fixing it. On the other hand, he’s not fixing it.”
“And,” he added, “not fixing it is, in a sense, making it worse.”
If people want to assign blame that's fine but it does nothing to fix the problem now. As much as people want to point fingers this is Obama and the Democrat's problem to fix, and we should expect them to fix it. This has to be done by a combination of spending restraint and raising taxes.
I disagree that Obama “is not fixing it”. In fact, I think it's odd that there has been no notice here of the admission by professional market analysts that the GM and Chrysler plays by Obama have turned things around. Instead, I see the right-leaning commenters here regurgitating GOP talking points about socialism. Here's what MSN Money has to say about the missing news here:
The problem with the Democrats is that they never, ever propose a tax cut. No tax hike is temporary, no spending increase is temporary. The problem with too many in government is that when the good times happen, they find new ways to spend the money and create new special interest. It is called the ratchet effect and has been talked about for decades. Conservatives tried to do things at the state level to limit the amount that government can increase spending. The progressives dismissed the ideas and now states face massive budget shortfalls.
If politicians thought they could get away with it, they would tax everyone at 100%.
P.S. I thought that the progressives would stop talking about deficits now that Presdient Obama is running massive deficits and creating massive new entitlements.
As the U.S. begins to nationalize industry and try to convert large parts of the economy to not-for-profit, people should wonder who will be left to pay taxes to keep everything going.
Dennis Sanders: “Being Fiscally Conservative Means…
The moderate-liberal Republican blogger opines that the Republican Party should back off the tax cuts mantra: “Republicans are upset about all the spending going on under President Obama. In someways, they should be concerned about all this. But then….
“The problem with the Democrats is that they never, ever propose a tax cut.”
Kennedy. Democratic controlled Congress 1962.
All tax cuts are not good. All tax increases are not bad.
That's why Republicans have raised taxes and are raising taxes in my state.
Bush giveth, Crist taketh away.