And your claim that the extra debt that we are piling up will not burden our children seems to be a typical supply-side position. It assumes that our children can continue the Ponzi scheme that we're engaged in. That is, when it's time to pay the extra interest on the extra debt, they can just borrow it. Then, when it's time to pay the extra interest on that, they can just borrow that! Isn't magical thinking wonderful?
Did you think the Clinton tax hikes benefited our children? I suppose we should roll back the Reagan tax cuts? The top rate should be 70%, for the children!!
Don't worry, under the guidance of you supply-siders, it probably will be! In fact, I think that a portion of Reagan's tax cut was sustainable, at least when combined with the closing of tax shelters and other reforms. The rates may have reached a sustainable level under Clinton. We balanced the budget for the first time since 1969 under Nixon. Being a fiscal conservative, I think the important thing is not the precise tax rate but its sustainability. Then people can actually start to plan with some confidence. Now, it's anyone's guess what tax rates will be in ten years (other than higher) and what the form our Social Security and Medicare systems will be. I can't speak for anyone else but I would estimate that, for every dollar of tax cuts I received, I put an additional two dollars in very conservative investments. I don't claim to be able to foresee the future. But Bush has put our national finances in a state that there is a much wider range of negative possibilities that I feel a need to prepare for.
That's right. When Reagan cut the top rate from 70% to 28% there was no free lunch. The 60% reduction in rates led to a 60% drop in government revenue. No free lunch there. Wait, you mean government revenues doubled over the 8 years of the Reagan presidency? Maybe there was a free lunch. Or at least a deeply discounted lunch.
The fact that government revenues doubled during the 80's (it was about 70 percent during Reagan's 8 years) would be impressive except for one fact. That is the fact that they had likewise doubled during EVERY SINGLE DECADE SINCE THE GREAT DEPRESSION! They went up 502.4% during the 40's, 134.5% during the 50's, 108.5% during the 60's, and 168.2% during the 70's. At 96.2 percent, they nearly doubled in the 90s as well. Hence, claiming that the Reagan tax cuts caused the doubling of revenues is like a rooster claiming credit for the dawn.
Furthermore, the receipts from individual income taxes (the only receipts directly affected by the tax cuts) went up only 91.3 percent during the 80's. Meanwhile, receipts from Social Insurance, which is directly affected by the FICA tax rate, went up 140.8 percent. This large increase was largely due to the fact that the FICA tax rate went up 25% from 6.13 to 7.65 percent of payroll. Hence, the claim that the doubling of TOTAL revenues proves the effectiveness of tax cuts is including revenues which resulted from a tax hike to prove the effectiveness of a tax cut. This seems like the height of hypocrisy.
You can read my full analysis of the Reagan tax cuts at http://home.att.net/~rdavis2/taxcuts.html. I'll ask you what I have asked scores of other supply-siders. Please point out any specific numbers or conclusions that you disagree with. Alternately, please post a link to one budget document or serious economic study that purports to show any major tax cut that has ever paid for itself. I am yet to get a serious response to either of those requests. Act now and you could be the first!
Please define "paid for itself".
But public debt is not piling up-- it's being reduced (re your graph and your data). By all accounts it's lower than it was in the '90's which was lower than it was in the '40's. You might argue that there are some ways to calculate debt that come out higher than last year, but to say current policy is a 'Ponzi scheme' is like saying the '90's was a nuclear holocaust.
I don't thing anybody here's saying Clinton was that bad.
