Starve The Beast
Over at Capital Commerce, James Pethokoukis wants to feed the beast now so it can be starved later. He warns Republicans not to support the stumulus bill because it will make it harder for them to cut taxes later. The money quote:
The lesson of the past quarter century is that big deficits make it more likely that taxes will raised, as in 1982, 1990 and 1993.
But not, of course, 2001 - 2008.
I've spent a lot of time in the middle of the "Starve the Beast" and "Supply Side Tax Cut" debates. I formulated the Roth-Kemp tax cut in early 1977 and, after working to scale it back, helped pass it in 1981 as the Republican tax economist on the Senate Budget Committee. I formulated the Earned Income Tax Credit in 1975 and have worked for Democrats too. I hold myself out as a non-partisan Washington economist. My main goal all along has been to improve tax and budget policy. I won't claim much success, but I would offer some observations.
Victor commented on one of Andrew's posts that he still believes in the Starve the Beast theory of budgeting. That precipitated a good discussion that I wan't to join, albeit just briefly.
Starve the Beast supposedly was a major strategy of the Reagan administration. The theory was that if it cut taxes and increased the deficit, it would will also increase the pressure on Congress to reduce spending to get the deficit back down.