Gbaji might have a field day?Follow

Let me see if I can clarify this. First off, Congress controls the pursestrings and therefor controls "spending", not the president. He can veto a budget, but that's about it. The best the president can do is cut taxes and hope that this will encourage lower spending.

It's not a coincidence that in a political environment where for the last half century the most common arrangement at the federal level has been a Republican president and a Democrat controlled congress that the definition of "fiscal conservative" has conveniently shifted to talk of "balancing the budget" and "avoiding debt".

Those are exactly the definitions that allow Democrats to push Republicans to raise taxes to support their spending increases. Cause, see... if they don't, then they're increasing debt. The Wiki article is a classic example of this, since it effectively blames Reagan for raising the debt to 41%. Of course, it was the Dem controlled congress the increased the spending, not Reagan. He just didn't raise taxes to match.

That's consistent with fiscal conservatism because it forces congress to slow down its spending. If you always raise taxes to balance the budget, then spending increases will never stop. Congress has every incentive to keep raising spending. It's how they make good on their campaign promises and it make their constituents happy. Fiscal conservatives will choose to keep taxes low and allow debt to grow in order to counter this. In fact, they *must* do this.


The objective of fiscal conservatives is to lower taxes. Period. Everything else is a means to that end. If that means that we have to allow debt to grow in order to create a "crisis" that will hopefully force spending cuts, that's how it has to be done. Insisting that we must always balance the budget is absurd. Doubly so in an environment where Liberals keep pushing for more and more expensive spending. How convenient for them that balancing said budget will always require a Republican president to raise taxes to match...

He just didn't raise taxes to match.

Of course he did. In '83, '84', '85', '86 and so on and so on.

Facts don't match rhetoric there Smash...

Are you retarded? Is that it?

You stated Regan didn't raise taxes. He did. Pretty much every year he was in office with the exception of the first two. It has nothing to with the budget or the GDP. If you want to argue he had to raise taxes because of: x, have a good time. I was simply stating the facts:

He cut taxes initially, ran up a massive debt almost immediately, and then raised taxes consistently for the rest of his presidency.

It's not a debate. It's what happened.

Sigh...

Missing the forest for the trees.

Taxes at the end of his terms was lower then it was at the beginning.


That's all the matters. That they went up and down and up and down each year doesn't matter. The general trend was downward. The end point was lower then it was at the starting point. This is the objective of fiscal conservatism. What part of that is confusing to you?

Taxes at the end of his terms was lower then it was at the beginning.


That's all the matters.

Yeah, right. Deep analysis. I'm not going to get into economics with you. I'm done wasting my time on something you so clearly don't understand on a scale larger than making change for a candy bar.

And they never came back to the same level they were before, right?

Depends on your definition. The highest personal marginal tax rate on the wealthy certainly didn't. The middle class, as usual, got raped.

lost interest

Edited, Feb 14th 2008 8:19pm by trickybeck

How convenient for you...

Burke disagrees with you but that's okay.

Burke wrote "just and proportional." Seems he did care about how taxes were applied, not just "overall footprint." Why can't you be a true conservative like Burke?


Addressing your other part, if lowering taxes is ultimate goal, why did he sign into law the subsequent tax increases? Once he had them low, he should have kept them low. No reason to raise them, he'd already achieved the Ultimate Goal of Fiscal Conservatism.

I'd have to read a bit more context to be sure, but I believe he was specifically talking about governments racking up debt for some spending increase and then foisting the payment of that debt upon the taxpayers, not specifically talking about which segment of taxpayers pay which share of the burden. But he could have been talking about that as well. In either case, it does not remove the larger issue and goal of reducing total footprint in the first place.

Let me also point out that the situation he's talking about is *not* the same as what Reagan and Bush did. He's talking about a government that introduces a massive spending increase without raising taxes, incurring large amounts of debt, and then later paying off that debt by raising taxes.

That's the process that Liberals use (as I mentioned earlier). They increase spending, raising debt. Then insist that taxes be increased in order to "balance the budget". Burke is specifically addressing the innate wrongness of that process.

What presidents like Bush and Reagan are doing is the exact opposite. They're starting from an existing point of spending. Then they cut taxes, creating the same debt. Then use that debt as a lever to decrease spending down the line. Both cases create debt, but one does so by attempting to decrease total taxes over time, while the other does the opposite.


It's a mistake to look just at whether debt is being generated. Why the debt appears matters. Raising debt as a consequence of lowering taxes is consistent with conservative fiscal policies. Raising debt as a consequence of increasing spending is not. I hope this makes sense to you. It's crystal clear to me, but it's apparent that not everyone sees this distinction...




Because it's a balancing act. A climber does not just move upwards while climbing a cliff, right? He moves up, down, sideways, etc, but with the goal to move upwards overall. Same deal here. You need that initial "big change" in tax rates to create an economic surge. But you need to moderate that a bit as well. If you just cut taxes to where you want them, you'll likely lose whatever ground you gained. Instead you cut them a bit farther, generate a "wow" effect (on both sides), and then compromise back to where you wanted them initially.

He initially cut taxes from about 20% overall to 16%. That generated a huge increase in economic growth, but also a pretty large deficit each year. Over the next few years, economic growth covered part of that deficit, and he gradually brought tax rates up to about 18% to meet in the middle. End result is a sustainable debt rate (about 37%), with a net tax footprint decrease of 2% (both numbers are percent of GDP).


End result is that taxes went down, but our debt isn't going up (stabilized at that 37% level). This is a good thing. You let that sit for a few years and stabilize fully, perhaps allow economic growth to take more effect and pay down that debt a bit more, then you repeat the process.

It takes time, but it's the right way to do things. You have to have a stable economic condition that maintains a level of taxes and a level of debt. What Dems tend to prefer are "quick fixes". The problem with those is that you're not establishing government spending/taxing habits. Quite the opposite, you just encourage more spending growth. Sure. We could raise taxes for the next ten years to pay off all our debt. Great. But what do you think will happen then? Do you really think that they'll lower taxes back again? Or do you think that as the debt gets paid off, the government will simply find other uses for the extra money?

I suspect the latter. As should most sane people. There are no quick fixes, and raising taxes to pay off debt ultimately hurts you more then it helps. The correlative statement is therefore true as well. Lowering taxes, even if it raises debt will ultimately help you more then it hurts you. As long as the interest on the debt isn't increasing faster then the economic gains from lowering the taxes that is. But that's why you do this layered "step" process. Big drop. Then gradual rise back, but not quite to the same level as before. Rinse repeat. It works. Well. It works until the Dems come along with another huge spending bill that is...

Setting aside the obvious inability to reach unanimity on what exactly constitutes "fiscal conservative", I'd just add that proposing more balanced budgets as a presidential candidate leads to electoral doom in the general election, at least since 1988 - and probably since 1980, although I don't know the details, I simply can't imagine they could have run up larger deficits then Reagan. The people vote for instant gratification. In the immortal words of our most glorious vice president, "Deficits don't matter. Reagan proved that".

In '88, all the numbers I saw indicated Clinton would run larger deficits then Bush (and Perot would run the lowest). Ditto Clinton over Dole. Bush Jr. arrives with tax cuts and no way to pay for them. This is the only case in which more people voted for less deficit, however Gore lost the election. Kerry vs. Bush actually I simply don't know who would have run larger deficits but at least Kerry had a plan in place to pay for his proposals - so at a minimum he wins on style.

War heroes (Bush Sr., Dole and Kerry) loose to service avoiders (Clinton and Bush Jr.) - even in times of war - so there are a number of fronts on which the American people have questionable selection methods.

Oh, and by the way, there is basically no correlation between the rate of per capita GDP growth and the highest marginal income tax rate. From 1952-2006, binning the data in 5 year increments, the coefficient is 0.007 - basically zero. A very tenuous connection could be seen if the value were, say, 0.50 or higher.