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The Spectacle Blog
Matt Yglesias and Ezra Klein have posts up arguing that Republicans — and even conservatives — don’t care about deficits. Yglesias cites the fact that Presidents Ronald Reagan and George W. Bush presided over large increases in deficits, while conservatives consistently oppose tax increases as a means to balance the budget.
I’d offer a few points in response, some historical, and some philosophical.
Reagan, it’s often said, came into office with the goals of building up the military and winning the Cold War, cutting taxes, and reducing the size of government. He was tremendously successful in the first two areas, but failed to achieve the third goal. Reagan at least had the excuse of a Democratic Congress that fought many of his proposed spending cuts, and, credit where due, he actually reduced non-defense discretionary spending by 13.5 percent in his first three years in office. Yet Bush embraced big government and got the Republican Congress to go along, but this was much to the chagrin of conservatives.
Liberals always want to credit the tax increases from the 1990 and 1993 budget plans for the deficit reduction of the 1990s, but this analysis neglects a lot of other completely separate developments during that era that largely contributed to the deficit reduction we experienced. One was the tech boom, which spurred economic growth and led to a windfall of revenue to the federal treasury. Another was the post-Cold War/pre-9/11 “peace dividend,” which triggered an historic reduction in military spending. And another factor was the election of the Republican Congress in 1994, because when a Democrat is in the White House, Republicans are much better at fighting government spending.
None of this analysis reflects well on Republicans, but it’s important to emphasize that ideological conservatives have consistently argued that spending is the driver of deficits. Liberals argue that tax cuts are what produce deficits, but the need to raise revenue is a direct result of lawmakers saying the government has a role in doing certain things. If that role were smaller, the government wouldn’t need as much revenue.
One of the most maddening perversions of the English language is when fiscal policy analysts describe tax cuts as a “cost.” A cost to whom? It certainly doesn’t represent a cost to the taxpayers who are now able to keep more of their own earnings and have more money to spend or save. To follow the liberal way of thinking to its logical conclusion is to say that government is ultimately entitled all money earned in America, and anything it collects short of that represents a “cost.”
If I were to sum up my view of true fiscal conservatism in one easy sentence, it would be: If government does less, it costs less, and can charge less.
Conservatives are inclined to support all tax cuts and oppose all tax increases because we want people to be able to keep more of their money, but we have been put in a difficult spot by Republican politicians who refuse to cut spending. Former Reagan era supply-sider Bruce Bartlett has waved the white flag, arguing that because Republicans will never actually reduce spending, conservatives should embrace more efficient means to raise revenue, such as the VAT tax. But as I concluded in my review of his book:
The current political paradox is that Democrats want to increase government services without acknowledging that broad-based tax increases are required to do so, and Republicans want to cut taxes without acknowledging that dramatic cuts to government services will be necessary to do so. This is clearly an unsustainable path. But if there are political risks associated with either tax hikes or spending cuts, it should be the role of conservatives to press Republicans into attacking spending. Ultimately, Bartlett loses sight of the fact that conservatives’ opposition to taxes is rooted not merely in economics or politics, but in a moral belief that individuals have a right to the product of their own labor.
As I’ve also insisted, conservatives should pressure Republican candidates into meeting the Paul Ryan test — either embrace his “Roadmap” plan, or come up with another serious plan to tackle our long-term debt crisis without raising taxes.
View all comments (24) | Leave a comment
More Blog Posts by Philip Klein
http://spectator.org/blog/2010/07/15/on-deficits-and-conservatism
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Oldefarte | 7.15.10 @ 11:54AM
Outstanding editorial, Philip...you nailed it! I'll take your reasoning one step further in stating that it involves governmental WELFARE. While helping the poor is noble, Democrats use government as a tool to effect their taxiation financial support of same, in order to gain the poor's votes for Democrats in return for receiving their governmental largesse. Since there has been generational financial support of indigents from governmental programs due to same lack of education and therefore inability to financially support themselves; it's way past time to being to solve the root problem of governmental welfare spending. To do same, our public educational system needs to be retooled and divorced from AEA in order to begin turning out graduates who are mentally capable of supporting themselves, instead of requiring the government to do so. If governmental welfare is substantially reduced/eliminated from this, then government spending is reduced to managable levels, and a budget balancing can be effected!!!!!!!!!!
Alan Brooks| 7.15.10 @ 8:49PM
Not in your lifetime.
You aint a spring chicken.
jrb| 7.16.10 @ 10:19AM
Much much more government welfare is corporate, not for poor individuals.
Cutting government spending starts- and could end- with cutting the wasteful, fraudulent and anti-democratic military.
Red Phillips | 7.15.10 @ 12:22PM
I agree, as should all conservatives, that spending, not tax cuts, is the problem. But it is true that mainstream movement conservatives are not serious about deficits because they are not willing to cut defense spending or decrease our interventionist commitments abroad, nor are they willing to deal seriously with programmed spending such as SS and Medicare. It is only Constitutionalist types, who the mainstream derides as “fringe,” who are serious about cutting spending.
Alan Brooks| 7.15.10 @ 8:47PM
Federal spending for OTHER's families.
Tell it to Granny, Red.
Bruce Bartlett| 7.15.10 @ 1:02PM
John Kyl says tax cuts must never be offset with spending cuts or tax increases, but unemployment benefits must be paid for. Mitch McConnell says all tax cuts raise revenue. Where are the conservatives saying these positions are nuts?
Derek Leaberry| 7.15.10 @ 1:02PM
Until Republicans are willing to make big cuts in defense spending almost twenty years aftere the demise of the USSR, they can't say that they are serious about the deficit. The defense cuts should include the end of stationing troops in Korea, Japan, Germany, the Middle East and the Balkans.
Red Phillips | 7.15.10 @ 1:07PM
Amen!
Alan Brooks| 7.15.10 @ 8:44PM
Well, good thing the Confederacy's armed forces weren't the best. Two cheers for Southern military unpreparedness.
martin j smith| 7.15.10 @ 1:35PM
Derek Leaberry, troll ditto red phillips.
My view is this:Sometimes it take a crisis to foce people to face reality. However, in the case of the crisis we are in Liberalo republicans and Left Democrats colluded to bring us where we are. At this time it is BHO--( oh yes, he is The President )
and it is his ball game to sin or lose. Plus legislation he has pushed and plans on pushing have put us over the hill. GWB I blame for his pushing mthe initial stage, but there are many Democrat Party folks at that time deserve even more credit or blame--Like Dodd and Frank for example --But it is Obama all the way now. he has done nothing to expand the economy in fact quite the reverse. As for the republican Leadership. Cowards is the right word.
William R| 7.15.10 @ 3:49PM
Not including Iraq and Afghanistan we have 865 military installations overseas. It doesn't take a rocket scientist to figure out that we can't begin to tackle the budget without big cuts in defense.
Michael P| 7.15.10 @ 5:23PM
There has only been two presidential terms since the post-war that would qualify as fiscally conservative, HW Bush and Clinton. HW conservatives ran out on a rail for Buchanan, and paved the way for Clinton in so doing. Eisenhower (he of the dime-store new deal), Nixon (of price controls, the EPA, normalizing China, EITC), Ford (ran a deficit every year he was in office), Reagan (Defense, Defense, Defense, but as is mentioned above, somehow he gets a mulligan from conservatives for being telegenic, but Democrats can't feel that way about OHB), and George W (Part D + Tax Cuts + War appropriations out of the budget so his numbers would look better) all failed to deliver in any substantial way. If fiscal conservativism, including deficit reduction, were a major plank of the Republican ideology, there would be a lot more evidence than this. Honestly, I love the call at the end for paying attention to the Ryan plan, but Gingrich (he of the '94 Congress that was so influential) was on record during the HCR debate stating that you 'can't cut medicare.' If this is a major issue for grassroots conservatives, its well past time they made it so.
Adam| 7.15.10 @ 6:35PM
The main driver of increased spending is Medicare, since medical inflation is quite high. Few conservatives actually want to cut it, and the few who do aren’t taken seriously by their leadership. It isn't 'liberals' deciding that new programs need to be started to attack societal problems. Thus, the healthcare reform law attacked the root problem of increased government spending. You use thinly-veiled claims that 'people's hard earned money' is being redistributed to 'certain people'. Conservative claims tend to routinely confuse causation with correlation (the tech boom 'causing' the 1990s surpluses for example), use absolutist language (liberals "always" want to credit this or that), incoherent claims (the spending of the 1980s and 1990s were the fault of congress until of course republicans took over congress) and of course straw man arguments (liberals think government is entitled to all money made). This post is quite shallow intellectually, but at least it makes a half hearted attempt to be intellectually honest, which is unusual coming from a conservative.
It is pointless to argue with a conservative. It must be wonderful to live in whatever alternative reality you guys occupy.
Sam Penrose| 7.15.10 @ 11:43PM
"Conservatives' opposition to taxes is rooted ... in a moral belief that individuals have a right to the product of their own labor"
There's a lot to say here, but I'll simply observe that almost none of what anyone produces is attributable to their labor: it's attributable to the civilization and society they inhabit. Place a tremendous worker/businessman/whatever in wilderness, and he will produce nothing there. Replace almost anyone with the next most productive worker/enterpreneur/whatever and they will do almost as well.
Mark MacInnis| 7.16.10 @ 9:28AM
You are missing the point, Sammie... Regardless of the moral argument of what portion of your own labor is the part YOU should be able to keep, there is the PSYCHOLOGICAL issue of incentivising behavior. At some point, confiscatory taxation destroys the motivation to earn more money or grow your business because you reach a point of diminishing returns....working harder but earning less due to taxation. When this motivation is destroyed, the impetus for growth of the overall economy is also destroyed....econonomies don't magically grow, they are lifted by the motivation for growth that resides in the hearts and minds of free people. If economies don't grow, jobs don't get created. If jobs don't get created, a.) taxes don't get paid, and b.) people become lazy and dependent on government support. A death spiral.
And I couldn't disagree more with your premise that "Place a tremendous businessman in the wilderness and he will produce nothing." You are ignoring the great history of this country. About 390 years ago, "tremendous"ly motivated free businessmen, and farmers were led to the North American wilderness. I'd have to argue that this country that those early Americans and their generations of children have built is hardly producing "nothing"...they buitl the greatest economy and country in the world, and everything you enjoy in your sad, unappreciative little life is due to the hard work, creativity, ingenuity, determination, grit, character, and integrity of generations of Americans who produced MUCH from this 'WILDERNESS"....and if you can't see that, I feel very sad for you. Is this country perfect, no far from it. Did the people who built this country and are still building it do everything right, no. But people who would condemn this country forget one thing....this country may not be perfect, but it is LIGHTYEARS better than any country you can ever name.
Don't know about you mate, but I am glad to stand on the shoulders of giants and produce what I can to keep this great economy growing....and I'll gladly pay a reasonable share for the necessities that a government should provide. But that doesn't include subsidizing the life of millions of uneducated (their choice) unproductive (their choice) leeches who could find a great opportunity in this country if they would just rise off their backsides and get moving....
Walter McQuie| 7.16.10 @ 11:28AM
No, he's not missing the point, you are moving the goalposts. The author explicitly states that the moral argument about fruits of one's labor is one of the roots of the conservative position on taxes. A response that the the moral landscape is more nuanced than the author lets on engages the point.
There is also a lot to be said about psychological incentivizing, much of it nuanced. Most people, if pressed, would be able to discern many factors in addition to taxes that incentivize their willingness to trade an explicit amount of their labor for a sum of cash. For some taxes might not even rank high on the list. Mr. Stein and Mr. Yglacias disagree about the cause and effect loop between 90's tax rates and tech boom as drivers of deficit reduction. But regarding incentives, note that the the relative higher tax rates in the 90's didn't convince entrepreneurs to sit on the sidelines and that not enough of the wealthy beneficiaries of the lowered tax rates in the 00's found enough incentive to put their money into endeavors that created jobs instead of fancy financial instruments.
Patrick Sheahan| 7.16.10 @ 2:42PM
And there was no WILDERNESS. There was a land populated by nations. Texas and California were even part of a European colonial country. And government has always been involved in business. Louisiana was not purchased by entrepenuers. The Mexican and Indian Wars were government subsidies of the "frontiersmen".
jrs| 7.16.10 @ 1:51AM
I hate taxes as much as any redblooded conservative, but must make the following observation. Tax cuts that aren't paid for (either by offsetting spending cuts or they increase economic activity enough---rarely actually happens) really isn't a tax cut. Instead, your ultimately must raise taxes in the future. Now, before someone incorrectly counters (as they've done before on here) that if we cut spending in the future, we've actually can reduce taxes. This is flawed however, in the fact that assuming that some government spending is ok, then we need to pay more for less services (aka a higher tax).
jrs| 7.16.10 @ 2:00AM
One of the greatest ironies of conservatives (something that true libertarians realize) is that they continuously say how bad big government is (and I can't disagree) until it comes to defense. In this case, somehow magically government does a good job in defense. Let's be real. The DOD is probably the most wasteful body of government out there. Therefore, even simpletons like Sarah Palin (yes, I really hate her, bring on the criticism) should realize that there should be no sacred cows, even defense. I see cuts to defense as this:
1. Everyone should agree that the DOD needs to get more efficient and cut waste. They can accomplish the same things with somehwhat less money.
2. More controversial, but we can't afford to continue funding a hawkish / imperialistic, etc... policies. This is the Ron Paul ideology, and seeming the hardest one for conservatives to swallow.
mike| 7.16.10 @ 3:08PM
If you are holding up the Ryan roadmap as a plan for reduced deficit's you are proving the point about not being serious about the deficit.
http://www.cbpp.org/cms/index......mp;id=3114