Robert,
Here is Robert Rubin's opinion of the Bush tax cuts:
Message 15334859
As you know, I agree with him. It is, IMO, really important to avoid going back to deep deficits. It is, shall we say, just a little suspicious that Bush ran on his $1.6 trillion dollar cuts, kept to that number while the economy was on steroids, kept to it throughout the steep drop in growth in Dec and Jan, kept to it throughout the increasing estimates of the deficit, and kept to it throughout his own and Cheney's statements that we are in or at least approaching a recession. It seems to be the case, if Mr. Bush is to be believed, that there is something sacred about this number, not too much and not too little; however it doesn't appear to based on any great analysis of economic conditions. Do the surplus projections take into account a scenario where we fall into a recession later this year? If not, then they are complete balderdash (which is, as you can probably guess, what I believe).
I am, with Rubin, a fiscally conservative Democrat. I think a lot of Democrats today are. The old Republican cry of "Tax and Spend Democrats" is hollow nonsense, if you really examine it. I'll repeat what I have said on this and other threads many times: to see really duplicitous government spending, go read David Stockman's account of the Reagan tax cuts, The Triumph of Politics." There was some Democratic complicity in it for sure, but the major deceit was the Administration rigging estimates of future revenue by just increasing their inflation assumptions beyond credability, even when the people doing the rigging knew that they were highly unlikely, and would increase the deficit beyond anything that would have been politically acceptable at the time.
It is more important to have lower interest rates than to have a gargantuan tax cut. Lower rates mean a lot of people benefit, rich and poor. Indeed, rich people benefit even more than poorer or middle class people because they tend to have higher loans outstanding. But more people benefit more from lower interest rates than lower tax rates. We must be very careful before reducing tax rates dramatically, and we must take every estimate of future surpluses--especially those beyond a year or two (and these which are fuzzy enough)--with a great deal of skepticism.
Sam |
