Tuesday, November 14, 2006

They're not tax cuts, they're tax deferrals!

Brad DeLong weighs in on BushCo's fiscal mismanagement. His salient point: "every single fiscal policy move of this administration has carried us in the wrong direction" -- something I have previously called the Anus Touch. Whether BushCo is incompetent or evil (or both), when they're lowering taxes and borrowing money to pay for expenditures, they're not cutting taxes... they just postponing them. And these blighters called themselves conservatives! Arrgh!

I would dispute Max's division. Of the $5 trillion ten-year swing in the deficit, $3.2 trillion--64%--is due to the Bush failure to properly fund the defense buildup--its insistence on cutting taxes even after it becomes clear that it wants to spend another fortune on defense.

The other 1.8 trillion--36%--is also the fault of the Bush administration: increases in other categories of spending above the 2001 projection baseline. Appropriate fiscal policy would have had us running a large surplus--a more than $2 trillion ten-year surplus--to prefund the expenditures that will be needed because of our aging population. No matter whether you think spending should be higher or lower than it currently is, every single fiscal policy move of this administration has carried us in the wrong direction, away from the surpluses we should be running right now, and collectively they have been a huge mistake. That tax cuts are not the overwhelming proportion of mistakes speaks not about the innocucuity... innocuousness... innocularity... whatever... of tax cuts, but of the magnitude of unfunded spending increases.

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