Yet it's been debated for over a hundred years now. In the early 1900s, a book called The New Deal was published. It advocated a planned economy which ignored free market principles, and offered up the newly formed Communist Russia as an example. Strike 1.FDR based his policies on the New Deal, and modern economists estimate the Depression-era unemployment rate was a full 8 points higher than necessary as a result. To him, reform was more important than recovery. Strike 2.
We survived the first two whiffs because of isolationism and the "good fortune" of timely wars, but the globalization of the economy and our recent attainment of $15 trillion in overdue bills will make "strike 3" deadly.
Avoiding Strike 3 requires an annual reduction of a trillion dollars in the federal budget (the current attempt to cut $62 billion, or 1.5%, is a drop in the bucket). While everyone says this will be difficult (from a political perspective), I contend it should not be (from a financial perspective).
That's not a conservative's opinion - that's fact.
5 comments:
Facts are slippery things. Some figures suggest US military spending is 56% of all discretionary spending, and some 44% of the military spending of the planet. Any talk of balanacing the budget without serious cuts to military spending seems disingenuous.
Any talk of how important it is to balance the budge while insisting that taxes must be cut, also seems a bit...math impared?
But I don't think the real debate is about the budget. I think it is about who gets to hold power over whom. That fight, I suspect, will leave us all as losers.
Revenues don't go up as taxes rise. They often go down. JFK understood that. For example, if the tax rate were 100%, revenue would fall immediately to zero - no one would work if they kept nothing.
I guess military spending would be a larger percent if the pie were defined smaller. But it's not. Evertything should be on the table, defense and all of the so-called "sacred cows".
I dont't recall that the Bush tax cuts caused revenues to go up, rather they led to the massive dept we have now, (aided by his ill-concieved wars). If conservatives really cared about the dept they would have let those tax cuts expire.
Taxes are simply a society paying for what it wants to do. If we want the biggest military in the world (by a factor of 2), if we want to protect the children and help the poor and provide health care for the sick (and we should) we simply have to own up to the responsibility to pay for it all. That is not likely to happen when increasing taxes has become the 3rd rail in politics, while cutting everything (except the military and security appratus) is now assumed to be some bass-ackwards "moral imparitive."
I know not all concervative feel that way, but it sure seems like a lot do.
Oh, by the way, if the tax rate went to zero that wouldn't help the debt either, nor would the society thrive. All of us need to stop driving every discussion to the absurd extreme...it simply doesn't accomplish anything.
As Reagan said, the Laffer curve exists ... as we both proved.
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