I could hardly believe my ears just now, watching former Reagan OMB Director Dave Stockman pronounce the end of the tax cut era on the PBS Newshour.
Stockman started by lambasting Wall Street gunslingers, of which he was one, for wrecking the financial system. Then he cited the AIG bailout as the worst policy mistake of our era. Then he said the deficits will have to be addressed, that the Reagan tax cuts failed to restrain government spending, and that we'll be forced to raise taxes from now on. That's an amazing turnaround from one of the original supply side torch bearers.
I formulated the Roth-Kemp tax cuts in early 1977 and couldn't conceive of their enactment. Four years later, I stood on the Senate floor in disbelief as they passed, wondering how long the red ink would last. The answer was 17 years. I saw plenty of wasteful spending along the way too. My Senate Budget Committee experience taught me that genuine deficit reduction is slow, tough work, which only succeeds when every tax loophole and wasteful spending project is attacked relentlessly, year in and year out, for decades.
I'm very concerned about the weakness of our recovery this year when the stimulus bill wears off in the second half of the year and when the Fed starts shrinking its balance sheet, so I would favor additional stimulus right now, particularly to avoid state government layoffs, but starting in 2011, we're going to have to get serious about spending cuts and tax increases -- just like Dave Stockman just said. Watch the video here.
Stockman
These views may be a surprise to you, but not to anyone who has followed Dave over the years, or have you fogotten the infamous William Grieder interview?
I just read Greider's
I just read Greider's interview and Stockman's memoir this January. I have to say that "The Triumph of Politics" is one of the most interesting political books I've read. While I'm ideologically opposite Stockman, he seems quite sincere about lowering government payments to the weak and the strong alike, which to me is an acceptable response to structural budget deficits.
I think liberals have a visceral antipathy toward conservatives who want to cut social programs because usually those same conservatives want to up Pentagon spending, business subsidies, and corporate welfare as well as make taxes more regressive.
But Stockman seems different.
Stockman
Mr Bartlett took the words of my mouth. Stockman has always been a closet iconoclast. Smart enough to know just how much a fraud voodoo economics really was. I imagine he's been dismayed at how long and tenaciously the "Regan tax cuts" supply-side gospel has been able to last. He's always got an angle and a wink to let the cognoscenti know he knows better. Don't tell me he's finally chastened!
Good Governing Not Equal to Good Politics
It's obvious that both sides are now frozen in fear of doing anything remotely resembling a tough budget choice. The Dems raised taxes a bit, as required, in the early 1990s and the Repubs punished them for it. Less learned.
This is what happens when the country is run by people who are more worried about maintaining their precious Congressional seat rather than what happens to the country.
"so I would favor additional
"so I would favor additional stimulus right now, particularly to avoid state government layoffs, but starting in 2011, we're going to have to get serious about spending cuts and tax increases"
What oversight is to be put in place to ensure the money is not wasted of non-existent districts, dead people getting Social Security, Maine to spend over $1.3 million on “government arts jobs”, “Microsoft Bridge” in Seattle will receive $11 million in stimulus funds, ...
Sure Pete; raise taxes but ignore spending...
Now do you know why people are fed up?
"Sure Pete; raise taxes but
"Sure Pete; raise taxes but ignore spending..."
If it happens it would surely be better than cutting taxes and ignoring spending.
2011
Why wait to do the right thing? Getting serious about spending cuts now would revive the economy better than any stimulus spending bill.
One of the dumbest assertions I've read in years
1936. You were probably alive. If not, look it up in any economic history book. Spending cuts in the middle of a depression, because they were worried about deficits and the economy was "coming back". 5 more years of depression ensued.
We ran this experiment. It failed. Take a look at today's Politico article on "Republicans against spending cuts in their own districts" and tell me if it sounds like a good idea to lay off a bunch of police, firemen, teachers and NASA engineers right now.
Idiotic.
Unless, of course, you're just trying to save yourself a buck or two...in which case you're simply venal, not an idiot.
Stockman Transcribed
Thanks for the pointer. Profound. I transcribed the key passage here:
http://www.asymptosis.com/david-stockman-on-starving-the-beast-game-over...
(With a few little comments of my own...)
5 more years of depression ensued: FDR saved from himself...
"We ran this experiment. It failed. Take a look at today's Politico article on "Republicans against spending cuts in their own districts" and tell me if it sounds like a good idea to lay off a bunch of police, firemen, teachers and NASA engineers right now.
Idiotic."
There are plenty of places to cut spending without denying essential services. Controlled spending would do more for this country that any sort of poorly spent stimulus funding.