The Concord Coalition bills itself as an organization dedicated to eliminating Federal budget deficits and restoring “fiscal responsibility.” And it certainly does passionately, insistently, and simplistically argue for the elimination of such deficits as the essential foundation for a sound economy and long-term economic growth.
But the odd thing is that if you follow its message more closely, you find another theme popping up over and over. Its people always seem to come back to saying that spending cuts are “unrealistic,” or “implausible,” or “impractical,” or even “draconian.”
But if you think balanced budgets are the sine qua non of good economic policy, and believe that spending reductions are not a viable option, where does that leave you? It leaves you with the heart and soul of the Concord Coalition, which is an organization dedicated to promoting tax increases and opposing tax cuts.
That should not be surprising, because the organization grew out of a residue of liberal Republicans and neoliberal Democrats who were in revulsion against what they derisively called Reaganomics, but who were routed politically by the Gipper.
Quite literally, “Reaganomics” was one of the most successful social and economic experiments in world history. Volumes can and have been written on this point. But it can be summarized as follows.
By 1973, virtually every major economic statistic regarding the American economy stopped improving, reflecting economic stagnation. By 1978, every major statistic started turning negative — poverty, unemployment, wages, family income, inflation, interest rates, and more. But in 1983, when the Reagan tax cuts were phased in, these statistics all turned around and started improving. From 1983 to 1989 inclusive, the economy boomed, adding during that period total economic output equivalent to the entire economy of West Germany, at the time one of the top 5 economies in the world. The best summary of it all can be found in The Seven Fat Years, by the late Robert Bartley, for many years head of the Wall Street Journal editorial page.
This experience followed the enormous success of the Kennedy tax cuts of the early 1960s, which followed the enormous success of the tax cuts engineered by Treasury Secretary Andrew Mellon in the early 1920s.
THE CONCORD COALITION, however, just ignored this astounding success, and doggedly pursued its simple-minded notion that the economy is all about the budget deficit. It applauded the Clinton Administration’s tax increases in 1993, which followed the Bush Administration tax increases in the 1990 budget deal. But these tax hikes failed to close the deficit gap, with $200 billion a year deficits still projected into the future indefinitely when the Republicans were elected to Congressional majorities in 1994.
The Concord Coalition opposed the tax cuts on capital adopted by the new Republican majorities, which caused the economy to boom, producing new, unexpected revenues. The deficits were turned around into huge surpluses when Congressional Republicans sharply restrained the growth of government spending for a couple of years in the face of the booming economy’s revenue surge. Experience at the state level shows over and over again as well that this is the way to balance a government’s budget, cut taxes to spur growth and restrain spending increases. Tax increases that slow the economy and revenue growth never work.
Nevertheless, the Concord Coalition still opposed the Bush tax cuts of 2001 and 2003, which saved the economy from a holdover Clinton era recession, and a sharp downturn threatened in the great uncertainty after 9/11.
Today, the Concord Coalition joins liberal Democrats in favoring the expiration of the Bush tax cuts scheduled under current law for 2010. This is what will happen if the Bush tax cuts are allowed to expire:
—The lowest income taxpayers will suffer a 33% increase in their income tax rate, from 10% to 15%;
—The top marginal income tax rate will increase from 35% to 39.5%;
—The capital gains tax will increase by 33% from 15% to 20%;
—The tax on the dividends received by many seniors will more than double from 15% to as much as 39.5%;
A man of faith in a godless age is hitting Americans where it hurts.
Mr. and Mrs. American Spectator Reader, let P.J. O’Rourke talk sense to your kids.
In Britain, defending your property can get you life.
The debacle of this president’s administration is both a cause and a symptom of the decline of American values. Unless Congress impeaches him, that decline will go on unchecked. An eminent jurist surveys the damage and assesses the chances for the recovery of our culture.
It won’t take long for conservatives to scratch this presidential wannabe off their 2008 scorecard.
The American Christmas, like the songs that celebrate it, makes room for everybody under the rainbow. Is that why so many people seem to be hostile to it?
Was the President done in by the economy, or by the politics of the economy?
H/T to National Review Online