Joanna
mike larkin wrote:
>December 23, 2005
>
>The Tax-Cut Zombies
>By PAUL KRUGMAN
>
>If you want someone to play Scrooge just before
>Christmas, Dick Cheney is your man. On Wednesday Mr.
>Cheney, acting as president of the Senate, cast the
>tie-breaking vote in favor of legislation that
>increases the fees charged to Medicaid recipients,
>lets states cut Medicaid benefits, reduces enforcement
>funds for child support, and more.
>
>For all its cruelty, however, the legislation will
>make only a tiny dent in the budget deficit: the cuts
>total about $8 billion a year, or one-third of 1
>percent of total federal spending.
>
>So ended 2005, the year that killed any remaining
>rationale for continuing tax cuts. But the hunger for
>tax cuts refuses to die.
>
>Since the 1970's, conservatives have used two theories
>to justify cutting taxes. One theory, supply-side
>economics, has always been hokum for the yokels.
>Conservative insiders adopted the supply-siders as
>mascots because they were useful to the cause, but
>never took them seriously.
>
>The insiders' theory - what we might call the true
>tax-cut theory - was memorably described by David
>Stockman, Ronald Reagan's budget director, as
>"starving the beast." Proponents of this theory argue
>that conservatives should seek tax cuts not because
>they won't create budget deficits, but because they
>will. Starve-the-beasters believe that budget deficits
>will lead to spending cuts that will eventually
>achieve their true aim: shrinking the government's
>role back to what it was under Calvin Coolidge.
>
>True to form, the insiders aren't buying the
>supply-siders' claim that a partial recovery in
>federal tax receipts from their plunge between 2000
>and 2003 shows that all's well on the fiscal front.
>(Revenue remains lower, and the federal budget deeper
>in deficit, than anyone expected a few years ago.)
>Instead, conservative heavyweights are using the
>budget deficit to call for cuts in key government
>programs.
>
>For example, in 2001 Alan Greenspan urged Congress to
>cut taxes to avoid running an excessively large budget
>surplus. Now he issues dire warnings about "fiscal
>instability." But rather than urging Congress to
>reverse the tax cuts he helped sell, he talks of the
>need to cut future Social Security and Medicare
>benefits.
>
>Yet at this point starve-the-beast theory looks as
>silly as supply-side economics. Although a disciplined
>conservative movement has controlled Congress and the
>White House for five years - and presided over record
>deficits - public opposition has prevented any
>significant cuts in the big social-insurance programs
>that dominate domestic spending.
>
>In fact, two years ago the Bush administration
>actually pushed through a major expansion in Medicare.
>True, the prescription drug bill clearly wasn't
>written by liberals. To a significant extent it's a
>giveaway to drug companies rather than a benefit for
>retirees. But all that corporate welfare makes the
>program more expensive, not less.
>
>Conservative intellectuals had high hopes that this
>year President Bush would make up for this betrayal of
>their doctrine by dealing a death blow to Social
>Security as we know it. Indeed, he tried. His proposed
>"reform" would, over time, have essentially phased out
>the program. And he seemed to have everything going
>for him: momentum from an election victory, control of
>Congress and a highly sympathetic punditocracy. Yet
>the drive for privatization quickly degenerated from a
>juggernaut into a farce.
>
>Medicaid, whose recipients are less likely to vote
>than the average person getting Social Security or
>Medicare, is the softest target among major federal
>social-insurance programs. But even members of
>Congress, it seems, have consciences. (Well, some of
>them.) It took intense arm-twisting from the
>Republican leadership, and that tie-breaking vote by
>Mr. Cheney, to ram through even modest cuts in aid to
>the neediest.
>
>In other words, the starve-the-beast theory - like
>missile defense - has been tested under the most
>favorable possible circumstances, and failed. So there
>is no longer any coherent justification for further
>tax cuts.
>
>Yet the cuts go on. In fact, even as Congressional
>leaders struggled to pass a tiny package of
>mean-spirited spending cuts, they pushed forward with
>a much larger package of tax cuts. The benefits of
>those cuts, as always, will go disproportionately to
>the wealthy.
>
>Here's how I see it: Republicans have turned into
>tax-cut zombies. They can't remember why they
>originally wanted to cut taxes, they can't explain how
>they plan to make up for the lost revenue, and they
>don't care. Instead, they just keep shambling forward,
>always hungry for more.
>
>http://select.nytimes.com/2005/12/23/opinion/23krugman.html?n=Top%2fOpinion%2fEditorials%20and%20Op%2dEd%2fOp%2dEd%2fColumnists%2fPaul%20Krugman
>
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