Fatten the Beast
by Don Boudreaux on May 14, 2010
in Data, Debt and Deficits, Myths and Fallacies, Reality Is Not Optional, Taxes
Here’s a letter to the New York Times:
Paul Krugman asserts that “taxes have lagged behind spending partly thanks to a deliberate political strategy, that of ’starve the beast’: conservatives have deliberately deprived the government of revenue in an attempt to force the spending cuts they now insist are necessary” (“We’re Not Greece,” May 14). Prof. Krugman’s interpretation of the facts is worse than bizarre.
During the alleged ascendancy of laissez-faireism – roughly, the last 30 years – Uncle Sam’s inflation-adjusted tax revenues have skyrocketed. Compared to 1980, inflation-adjusted tax revenues for 2010 are projected to be higher by 61 percent. And in 2007 (the last year before the current recession), Uncle Sam’s real revenues were more than 100 percent higher than they were in the year that voters first put Ronald Reagan into the Oval Office.* During this same time, U.S. population increased by only 35 percent.
This beast is no more deprived of revenue than Prof. Krugman is deprived of the gall necessary to misrepresent facts with a straight face.
Sincerely,
Donald J. Boudreaux
* Figures calculated from data found in Table 1.3 here.
If your real income rises by 61 percent, but your real expenditures rise by 142 percent, do you blame your resulting financial woes of your being “deprived” of income?
Here’s John Stossel’s dissection of Krugman’s column.
cafehayek.com
Dr. Congress and Mr. Hydieous
by Don Boudreaux on May 15, 2010
in Debt and Deficits, Other People's Money, Taxes
Here’s a letter to the New York Times:
Paul Krugman claims that anti-tax conservatives have “deprived” Uncle Sam of tax revenues (“We’re Not Greece,” May 14). Because these inflation-adjusted revenues reached an all-time high in 2007 (just before the current recession) – and because, even in 2010, they remain 61 percent higher than they were in 1980 (the year the alleged curse of laissez-faireism befell America) – the only way Prof. Krugman can salvage his claim is to note that these revenues, although growing, haven’t kept pace with Uncle Sam’s even-faster-growing spending.
Alas, this attempted salvage operation fails. It assumes that the expenditure side of Uncle Sam’s budget accurately reflects the appropriate will of The People while the revenue side reflects the evil machinations of forces bent on undermining The People’s will and best interests. Prof. Krugman can’t have it both ways. If he insists that Congress and the President are inspired public servants when they fashion the spending side of the budget, he cannot legitimately insist that these same officials are dupes or miscreants when they fashion the revenue side.
Put differently, it’s at least as justified to accuse left-liberals of recklessly fattening the beast with excessive spending as it is to accuse conservatives of greedily starving the beast with brakes on tax hikes. Indeed, given human beings’ natural irresponsibility when spending other people’s money, the former accusation is far more plausible than the latter.
Sincerely,
Donald J. Boudreaux
cafehayek.com |
