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Republican tax cuts - where are the spending cuts?
Posted by: McQ on Thursday, January 17, 2008

The Wall Street Journal has a compendium today of all the tax cuts Republican candidates are proposing. Then, while talking about McCain's tax cut proposals, the WSJ says:
The Arizona Senator is still insisting that any tax cuts be "paid for" with spending reductions, which sounds good but could let Democrats block his tax cuts merely by refusing to cut spending. The better policy and politics is to cut taxes first, while doing one's best to slow spending growth. A growing economy will shrink any deficit.
Nonsense. For tax cuts to have any real impact, they must have commensurate spending cuts. Not just slowing of growth of spending, but real honest to goodness cuts in federal spending. That means 20 billion dollar's worth of tax cuts should also mean 20 billion dollar in spending cuts. Otherwise, the size of the federal budget remains the same and the government simply borrows to fill the void.

Now, I'm like Milton Friedman in that I like tax cuts for any reason at any time. But that's only half of what must be done and it's high time the candidates included their spending cuts in their tax cut plans as a matter of habit.
 
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Previous Comments to this Post 

Comments
You don’t really expect McCain to offer spending cuts while he’s pandering to the so-called ’center’ do you really?

 
Written By: Bithead
URL: http://bitsblog.florack.us
it’s high time the candidates included their spending cuts in their tax cut plans as a matter of habit.
You mean like this:
Leading and making the hard choices necessary, to include cutting wasteful government spending, to safeguard our security, promote our prosperity, and protect our children and grandchildren from fiscal calamity.
I know, it’s not really a plan, but it is a principle by which to lead.
 
Written By: Keith_Indy
URL: http://asecondhandconjecture.com
If the tax cuts precede a healthier economy they will pay for themselves in part of full. Of course this opens the door to a Laffer Curve discussion which will isn’t any better than the anrachnoid discussions a few stories down.

Regardless we should be shooting for a surplus and us it to pay down the debt.

Ever since Clinton refinance the debt with short term low interest loans to help get a budget surplus under his administration we have a ticking time bomb. High interest rates for any length of time will balloon our interest payments rediculously at a time when we probably won’t have the economy to afford it.
 
Written By: jpm100
URL: http://
You mean like this:
No. Those are mere words. Show me details.

If they can say "cut the corporate income tax by 10% and the whatever by whatever percent", then they can also say "cut the departement of whatever by x%, cut back this program by y% and this one by z%".

Details, not vague base pleasing promises which never see the light of day in their administration.
 
Written By: McQ
URL: http://www.qando.net/blog
to have any real impact,
I think that depends on what specific impact you’re talking about.

If we’re talking only the relative debt/deficit, then tax cuts and slow growth of spending, or spending caps, or cutting spending will all be effective over a period of several years to reduce the deficit and possibly develop a surplus and reduce debt. We saw the tax cuts quickly raised the revenues, but unfortunately the last couple congresses (and the President) grew spending and added an entirely new entitlement program (WTF???) that squandered the money which was raised.

However, if you’re talking about shrinking gov’t, then I agree with your followup and it really should be targeted at specific programs, departments, etc.

NED
 
Written By: NewEnglandDevil
URL: http://
However, if you’re talking about shrinking gov’t, then I agree with your followup and it really should be targeted at specific programs, departments, etc.
Good point Ned, should have been clearer in the post. Shrinking government is my aim and detailed spending cut proposals would help Republicans differentiate specifically between candidates who have that as an aim and those who are simply attempting to pander to the base with no real intent of every following through on the "cut" side.
 
Written By: McQ
URL: http://www.qando.net/blog
That is why I put the caveat in there:
it’s not really a plan
I find (not being a pure Fred-head) that I didn’t dig deep enough...

http://www.fred08.com/Virtual/Media/SpendingReform.pdf

Which still doesn’t quite meet your standards, but is more detailed then a campaign slogan.

I think Fred also has the record in the Senate that backs up his principles.

http://www.fred08.com/Virtual/Federalism.aspx

I don’t think any particular candidate is a 100% match. Some are good on some issues and lousy on others. I’m pretty certain if you contacted Fred’s campaign with specific questions on what cuts he could envision, you stand a good chance of getting a response.

And I do agree, more detailed proposals, and how their records back up those proposals, would be a good thing.
 
Written By: Keith_Indy
URL: http://asecondhandconjecture.com
Oh, and I’m only suggesting you contact them, rather then myself because you’ve got a much wider read blog them ours. :)
 
Written By: Keith_Indy
URL: http://asecondhandconjecture.com
As an alternative to specific programs to be cut, which then makes you "enemies" I might propose simply stating that you will hold non-entitlement spending to the rate of inflation or the rate of inflation, minus-0.5%. It gives you a little wiggle room. If you hold growth to current levels of inflation, economic growth will result in SHRINKING the budget, as a percentage of GDP.

If anyone here thinks that the US gov’t is going to spend 1 dollar LESS than it did last year, you probably will want to buy some land I have for sale in FL.
 
Written By: Joe
URL: http://
Which still doesn’t quite meet your standards, but is more detailed then a campaign slogan.
Hey, that’s better than most, but still, don’t you think it’s a level of detail Republicans ought to demand from those candidates? Especially since they’re having such a tough time breaking anyone out of the pack. Another differentiator.
 
Written By: McQ
URL: http://www.qando.net/blog
As an alternative to specific programs to be cut, which then makes you "enemies" I might propose simply stating that you will hold non-entitlement spending to the rate of inflation or the rate of inflation, minus-0.5%.
Maybe its me, but when I see X number of dollars in tax cuts I want to see X numbers of dollars in specific and targeted cuts that match. Vague promises to essentially hold spending down (none of which are ever kept for any number of reasons) avoid metrics by which voters can measure performance.

X billions of dollars cut in specific areas are something which can be identified and measured, and something the base can raise h*ll about if it doesn’t happen and not be a subject to a version of stupid accounting tricks to claim the goal was met.
 
Written By: McQ
URL: http://www.qando.net/blog
X billions of dollars cut in specific areas are something which can be identified and measured
Indeed they can be and rest assured everyone who will see their spending fall will vote against you. Cut Defense, watch the Contractors, DoD personnel, and the Defense Conservatives jump on you....Cut Farm Aid, lose Iowa, Kansas, and other farm states, and so it goes. Simply saying that you will reduce spending, by a percentage point a year, as a portion of GDP, MIGHT fly. It’s what happened in the 1990’s. The government grew less rapidly than the economy and shrank as a portion GDP. But if you say, "I am going to cut ’x’ from the Veterans Affairs budget" well good luck with that. Plus it assumes you can know, before hand, where the fat is in the budget and the agencies. Everyone squirrels money away in their budget and you need to get into OMB to find out who has what where....so a specific target amount might be more politically viable. And if you don’t get into 1600 PA Ave. all the good ideas in the world don’t get you much!

Admittedly the above is, not pure, and is adulterated and involves the real world, as I see it, and so it might not pass the "purity test" but it might might see some budgetary results...alternatively we can all just go live in a shack somewhere and IGNORE government.
 
Written By: Joe
URL: http://
I do agree, more detailed proposals, and how their records back up those proposals, would be a good thing.
It’s just in todays political climate, a politician committing themselves to concrete proposals, is improbable, and unrealistic.

I think Fred would respond if enough people were asking though. And I think you’ve nailed the crux of the problem. "Republicans ought to demand," but they aren’t.

Many people seem to be wrapped up in other ideological arguments. Whether it’s the social-cons for Huck, or the sub-groups backing the other candidates. They all have "their reasons" for supporting candidate U. The candidates are playing to their supporters, and generally not paying as much attention to the rest of us, who haven’t really decided which candidate best meets their needs.

While Fred is close, more detail would probably seal the deal.

And Joe, Fred’s paper does say he’d keep some spending (non-defense) pegged to inflation.
 
Written By: Keith_Indy
URL: http://asecondhandconjecture.com
Indeed they can be and rest assured everyone who will see their spending fall will vote against you.
Oh I don’t know Joe, most won’t get past "tax cut".

And it also means Republicans would have to actually, hold on now, elect a leader instead of a politician to make those cuts seem more than palatable, but, in fact, a reason to elect him (or her).

I know that’s a tall order and the pickin’s aren’t very good, but it sure would be a nice change, huh?
 
Written By: McQ
URL: http://www.qando.net/blog
Well Ketih good for him, I like ole’ Fred and hope he wins election, he got my vote and about $25 of mine.

Well McQ I’m on the same page as you, I just think there are ways of doing things and then there are ways of doing things...I just think my way preserves more political flexibility and makes a candidate more electable.

In terms of "leader" v. "politician" it’s possible Fred is one or that Mitt is one or that Rudy is one..the last two have actually LED something. And remember, Reagan and NEWT came in promising to abolish Dept. of Education...saying it isn’t doing it. Does it mean that they weren’t leaders?
 
Written By: Joe
URL: http://
Does it mean that they weren’t leaders?
Of course not Joe ... it means they failed to accomplish what they promised. But it wasn’t some vague general hand-wave was it? And trust me, Gingrich still hears about not getting rid of that department. That, my friends, is how it should be, at a very minimum.

Accountability - what a concept.
 
Written By: McQ
URL: http://www.qando.net/blog
I guess there’s another point to make. Lack of knowledge about what the candidates actually say and stand for.

We complain about the inadequacies of the MSM all the time when it comes to Iraq, but don’t always remember to have the same skepticism with regards to other issues.

I didn’t know about Fred’s specific positions until I looked them up. Certainly haven’t heard them on the MSM. And just because a candidate may think the message is getting out because he’s talking about it in front of a camera. It doesn’t mean jack beans in real life as the editing and "sound clipping" for our news-etainment makes relying on the MSM for real information some bad, sick joke.
 
Written By: Keith_Indy
URL: http://asecondhandconjecture.com
McQ hits the nail square on the head with this one. Ain’t no such thing as a tax cut without a spending cut. Every dollar that government spends is a dollar it will have to collect in taxes sometime. Unless you cut spending you’re just delaying taxes not cutting them.
 
Written By: Retief
URL: http://
Long Term running a defecit is a bad idea and highly likely to damage the economy. However if there is a slow down related to a restriction in cash it might become a good idea to funnel some government borrowing into the economy right now.
 
Written By: unaha-closp
URL: http://warisforwinning.blogspot.com/
That’s funny, you said "spending" and "cuts" in the same breath, like right next to each other.

Sh*t happens. Compost happens. Death and taxes happen. Spending cuts? Spending cuts don’t happen.

We need to do this the Liberal Capitalist way. We need to quit thinking in terms of "cutting" government spending and refocus on how to get the government to spend less money. Spending can’t be cut because entitlement programs can’t be cut politically. The only other option I can think of is to replace our current entitlement regime with another that consumes fewer resources. This would preferably occur simultaneously with comprehensive tax reform.

yours/
peter.
 
Written By: peter jackson
URL: www.liberalcapitalist.com
"Reduced spending" is the truth, and is needed. "Freezing Budgets" is probably politically doable (equal, not less), and so it would be great if some Reps would declare they want to Freeze the budget of the Dept. of Education, for instance.

Another issue is user fees vs. tax. Both go to the gov’t, but a user fee (for a road or education or national park) has a relationship to the service. One big way to reduce gov’t spending (and taxes) is to replace free programs with user fee programs, so the small fee can reduce taxes but also reduce the overuse of the service.

I’d actually like a Rep to more honestly make the gov’t act like a real insurance company, since the voters clearly demand that the gov’t pay up to those in crisis as if the gov’t is an insurance company. This would mean, in CA or New Orleans for instance, that gov’t emergency funds be repaid by an increase in local taxes for the purpose of repaying.

I’d also like "Tax loans", where gov’t replaces current gov’t cash programs with gov’t loan programs, where the recipient of gov’t cash is expected to pay it back, thru taxes plus a surtax like loan repayment.


Reducing gov’t spending means, partly, reducing the desire of the voters for Other People’s Money. As long as it’s free money, there will be a big desire for it.


Where is the talk of more detailed budget spending info available on the internet? All Fed money to local gov’t should be totally transparent and trackable. This should be part of the accountability...
 
Written By: Tom Grey
URL: http://tomgrey.motime.com

 
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