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In the latest National Review, Kevin D. Williamson has an essay, “Goodbye Supply Side,” calmly sorting through some of the right-wing’s “magical thinking” about tax cuts, namely that they pay for themselves and also shrink the government.
The reactions to the piece have been surprisingly…surprised. “This is an extremely important issue for the future of conservative governance,” Ross Douthat nods approvingly. “It’s a very big deal,” Jonathan Chait agrees. “I hope conservatives read it,” writes Matt Yglesias.
While Williamson’s article is a very smart rebuke to those people (of whom, certainly, there are still many among conservatives) who would oversell the fiscal benefits of tax cuts, its publication is not exactly a watershed moment. I don’t think the idea that the Laffer Curve always applies has as much currency among right-wingers as the conservative movement’s detractors believe. For instance, none of the low-tax fans here at the Spectator thinks that we are currently on the wrong side of the Laffer Curve (or at least I’ve never heard that — I’m sure they’ll correct me if I’m wrong). And while Williamson draws a lot of attention for cautiously laying out the case that the Reagan tax cuts were a myth because they did not go hand-in-hand with spending cuts, it’s not a new argument for conservatives that the tax cuts were not Reagan’s greatest domestic achievement. Perhaps the best example of this right-wing revisionism is Robert Samuelson’s The Great Inflation, in which Samuelson ascribes Reagan’s success to his political backing of Paul Volcker in Volcker’s quest to stamp out inflation — while also downplaying the role the tax cuts played.
Williamson ends his essay with a suggestion for a new approach on tax cuts:
So, what should conservatives do? One, abjure magical thinking about tax cuts. Two, develop a rhetoric in which “spending” and “taxes” are synonyms, so a federal budget with $1 trillion in new spending means $1 trillion in new taxes - levies on Americans today or on our children tomorrow, with interest. Three, get a load of those tea-party yokels, with their funny hats and dysgraphic signage, and keep this in mind: They are opposed to the Democrats, but what they are really looking for is an alternative to the establishment Republicans, whom they distrust, with good reason, when it comes to the bottom-line question of balancing the budget and getting our fiscal affairs in good order.
This is very well stated.
But notice that this point is not exactly lost on the right wing of today. I would argue that the Tea Parties exist almost solely to affirm the concept that spending equals taxation. They have mobilized against the massive increases in the federal budget even though the corresponding massive tax hikes have not yet materialized. And the flip side of the coin is that liberals who deride Tea Partiers for protesting against tax increases when Obama has actually lowered their taxes for the time being — which is to say most liberals — are engaging in the exact kind of “magical thinking” that led the supply-siders of yesterday to believe they could balance the budget by cutting taxes.
UPDATE: Judson Phillips is not the kind of Tea Partier I had in mind, but I also don’t think he’s representative.
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.
It won’t take long for conservatives to scratch this presidential wannabe off their 2008 scorecard.
Was the President done in by the economy, or by the politics of the economy?