Republicans say (and do) lots of stupid things, but the current fiscal debate has me focused on two specific statements. Both get me very agitated. Indeed, I’m so irritated that all Republican politicians should be fitted with shock collars and then zapped when they utter either one of these statements.
Dumb Remark #1: “We shouldn’t raise taxes in a recession.”
This statement, or variations of that statement, gets me agitated because it implies that it’s okay to raise taxes when the economy is doing better. If we want to restrain the size of government, we should never increase the flow of revenue to Washington. Not now, not ever.
I can understand that GOPers want to make the strongest possible argument against tax hikes, so it does make sense to exploit unease about a weak economy. But there’s a better way to do it.
Smart Remark #1: “It’s always a bad idea to raise taxes, but raising taxes in a recession is especially foolish.”
Sure, it adds an extra clause to the sentence, and politicians sometimes have trouble walking and chewing gum at the same time, but I don’t think this is asking too much.
Dumb Remark #2: “We need to solve America’s debt crisis.”
This sentence (or its inbred cousin: “we need to solve America’s deficit crisis”) is like a cheese grater against my skin. It implies that big government is okay so long as we have an onerous tax system that collects lots of money.
Once again, I understand the desire of GOPers to make some reference to government borrowing. The establishment press endlessly refers to debt and deficits, and many Americans views red ink as symptoms of something amiss in Washington, but why not seize the opportunity to highlight the real problem?
Smart Remark #2: “We need to address Washington’s spending problem to avoid a Greek-style debt crisis.”
Yes, I’m asking politicians to put together a sentence that contains more words, but maybe this video will help them understand that spending is the disease and deficits are a symptom.
[…] P.S. To help them understand this point, Republicans need shock therapy. […]
[…] that he explains that the real problem is spending, not just red ink (a point I often make, but not always successfully, when talking to […]
[…] that he explains that the real problem is spending, not just red ink (a point I often make, but not always successfully, when talking to […]
[…] that he explains that the real problem is spending, not just red ink (a point I often make, but not always successfully, when talking to […]
[…] that he explains that the real problem is spending, not just red ink (a point I often make, but not always successfully, when talking to […]
[…] That’s no reason for complacency, because spendaholics have on occasion gulled the Dumb Party into providing bi-partisan cover for unpopular tax hikes. President G.H.W. […]
[…] there’s a reason that the GOP is known as the “stupid party” and this year’s tax fight may give them an opportunity to further demonstrate their ineptitude. […]
[…] there’s a reason that the GOP is known as the “stupid party” and this year’s tax fight may give them an opportunity to further demonstrate their […]
[…] remarked before that Democrats are the evil party and Republicans are the stupid party. Well, if anyone needs additional proof about GOPers being clueless and tone deaf, exhibit A […]
[…] remarked before that Democrats are the evil party and Republicans are the stupid party. Well, if anyone needs additional proof about GOPers being clueless and tone deaf, exhibit A […]
[…] remarked before that Democrats are the evil party and Republicans are the stupid party. Well, if anyone needs additional proof about GOPers being clueless and tone deaf, exhibit A […]
[…] only issue is whether members of the Stupid Party agree to a tax hike so that the burden of federal spending can climb even […]
[…] == "undefined"){ addthis_share = [];}Dan Mitchell (points: 10) Not Ranked YetI have sometimes wondered whether it is accurate to say that Republicans are the “Stupid Party.” We’ll […]
[…] I have sometimes wondered whether it is accurate to say that Republicans are the “Stupid Party.” We’ll soon know the answer to that question. As part of the debt limit agreement, the politicians agreed to set up a “Super Committee” comprised of six Republicans and six Democrats that are responsible for producing at least $1.2 trillion of supposed deficit reduction. But the Democrats appointed a group of hardcore leftists to the super committee, which means that it is virtually impossible to get the necessary seven votes for a good agreement. Indeed, the more relevant question is whether one or more of the Republicans surrenders to a big tax hike. […]
[…] I have sometimes wondered whether it is accurate to say that Republicans are the “Stupid Party.” […]
[…] I have sometimes wondered whether it is accurate to say that Republicans are the “Stupid Party.” […]
[…] the past, I’ve gotten very frustrated with incompetent Republicans who fixate on deficits and debt. Red ink is not good, of course, but the only good way to treat the […]
Hi there, I discovered your blog via Google even as searching for a related subject, your web site came up, it looks good. I have bookmarked it in my google bookmarks.
@drdelos
You are certainly correct that not very many people paid at the maximum tax rate of 91% in the 1950s. One exception was the great comedian, Ernie Kovacs. High flyers in the movie and entertainment industry were one of the groups that earned enough income to qualify for the highest tax rate on earned income. Kovacs objected to paying so much in taxes and didn’t remit very much to the IRS. As a result, the IRS dunned him for 90% of his earnings. After his untimely death, his wife, Eddie Adams, was stuck with hundreds of thousands of dollars of IRS tax liens.
The trust fund types, the corporate titans, the oil well millionaires and the Wall Street financiers invested in tax shelters and/or tax-free minicipal bonds. It was from middle America that the bulk of the taxes were collected.
Mr. Art R.
Government spending was considerably lower in the 1950s. And government spending SLOWS GROWTH. You can read that in this landmark paper The Impact of Government Spending on Economic Growth http://www.heritage.org/research/reports/2005/03/the-impact-of-government-spending-on-economic-growth by Mr. Dan Mitchell. There Mr. Mitchell shows MASSIVE multi country empirical evidence about INCREASING government spending SLOWING growth.
Or you can read this other landmark paper The Size and Functions of Government And Economic Growth http://www.house.gov/jec/growth/function/function.htm where you can see INCREASING GOVERNMENT spending SLOWING growth and DECREASING government spending ACCELERATING growth. That paper shows how in the USA in 1960-1996 INCREASED government spending was accompanied by SLOWER growth. You can see there how TOTAL (federal plus others) government spending in the USA was 28.4% of GDP in 1960 while now it is about 40%. You can go to the St Louis Federal Reserve FRED Website and you can compute Federal Spending as a percentage of GDP and you will see that THE GREAT DEPRESSION was a period of HUGE increase in federal government spending.
If you look at recessions it becomes obvious that ” tight money” triggers them, tight money preceded every one of the recessions that follow. But after the early 1920s recession there were the Harding Tax Cuts, after the late 1950s recession there were the Kennedy Tax Cuts, after the early 1980s recession there were the Reagan Tax Cuts and after the 2000 Recession there were the Bush Tax Cuts. Periods of prosperity. But after the 1929 very tight money (see the 1928 exorbitant short term interest rates and Robert Mundell’s work) there were no tax cuts. Just the opposite went on: MORE government spending, MORE taxes and MORE regulations. They gave the economy the socialist “more oppressive government” medicine. But USA got THE GREAT DEPRESSION, a terrible crisis period where, moreover, unemployment was very high for more than 10 years while Keynes “medicine” for unemployment -higher government spending- was massively applied.
These very important facts agree with tax cuts offsetting the damage done by higher government spending. If government spending was higher during the 1950s then growth would have been slower then. And the low government spending 1800s had spectacular USA growth, the USA became the world superpower in record time during that high growth low government spending period (probably less than 10% of GDP TOTAL govt spending in the 1800s!)
Your are posting tax cut demonizing arguments espoused by Mr. Paul Krugman. But Mr. Krugman ultimate defeat in demonizing tax cuts came when Mr. Obama, one of the most socialist presidents ever, extended the Bush tax cuts. It is your arguments that are fundamentally amiss, Mr. Art R.
@drdelos. Well said. We had a maximum tax rate of 91% on taxable income. And through accounting sleight-of-hand, the taxable income was well below actual income. Only the foolish ever paid 91%.
Art, the progressives whip out that 91% tax rate nonsense to try and show how much lower our taxes are today, but that rate was a shell game that doesn’t hold up to scrutiny. It was designed to give congress more power over the spending of the wealthy, not to raise more revenue. When the rate is that high the value of any tax deduction is magnified dramatically. Congress loved being able to get the rich to jump at their whim. There were hundreds, if not thousands of special tax deductions that we don’t have anymore due to them being phased out as tax rates were reduced. Remember the scandals about buying worthless old movies for a pittance so the rich could depreciate them over time. Or how about the race horse depreciation allowances?
The rich paid about the same in real tax rates as they are now after all the allowances and gimmicks were applied. When a congressperson sneaks a million dollar deduction for a constituent, it is exactly the same as handing them a million dollars in cash except it comes out of our pockets.
Daniel, how come we enjoyed a decade of true prosperity in the 1950s when the maximum income tax rate was 91%? We paid off a lot of the debt accumulated during WWII, financed the reconstruction of Europe, fought the Korea war and the cold war and started construction of the interstate highway system. And banks paid 3% interest on passbook savings versus 1/8 of 1% today.
Debt is acceptable when it is used to finance production or lasting infrastructure improvements. Debt used to finance idiotic wars (strangely, you didn’t list the Bush wars in the above video) and to support consumption and a lifestyle we haven’t earned is bad. We’ve been living way beyond our means for a long time.
Hasn’t it occurred to you that there is something fundamentally amiss with our current economic model and that the massive deficits of late are a manifestation of same? Some day, and I hope it is soon, you will come to understand that when you destroy your industrial base, you destroy your wealth.
I’m 1/3 of the way into Reckless Endangerment by Gretchen Morgenson and Joshua Rosner, and it’s not just spending per se. It would be one thing if the spending actually accomplished some good, in line with the Constitution, but if this story is any indication (and I think it probably is), much of the spending DC does is fraudulent, designed more to make government grow and make its friends wealthy than for any other reason.
People are outraged about Casey Anthony. What they ought to be outraged at is what James Johnson did to our country in order to enrich himself. He ought to be glad I won’t be on his jury, if he ever gets one, and he deserves it.