Or is it the other way round? I never can remember. There seems to be similar confusion developing about how to halt the metastasis of government: shrink revenues and starve the beast? -- or turn the faucets on and wait for voters to notice how much more all of the new entitlements cost? The answer may lie in who's connected to the faucets. If it's always the other guy paying the taxes, or (worse) loaning us the money, then a solid majority of American voters seem prepared to vote for government-funded everything-you-can-possibly-imagine. On the other hand, if the tax burden were flatter and more universal, it would be harder to win a public vote over raising money for more collectivized goodies.
Steve King (R-Iowa) argues that our president may be more than willing to go over the fiscal cliff, because despite the huge recession that's expected to result, at least the tax code will have been forced further into progressive territory. Terminating the Bush income and estate tax cuts doesn't just mean increasing revenue by a small percentage of the annual deficit, it means feeding class envy. A thin, dingy silver lining of achieving this goal via broad-based tax hikes rather than "millionaire taxes" may be that the burden will fall on the many rather than the few, which (in time) could restore the feedback loop and temper the appetite of voters to ask for bigger and more expensive government.
But I doubt it. More likely we'll just damage the economy, increase joblessness, and set off a new round of cries for government rescues.
3 comments:
George Will made a similar point Sunday on ABC, to the effect that for 40 years Democrats have striven to do two things: raise taxes and slash military spending. Going over the cliff would accomplish both.
...turn the faucets on and wait for voters to notice how much more all of the new entitlements cost[.]
I decline to go the way of Argentina.
As to the expiry of the Bush tax cuts, they'll go up for everyone, not just a small group of Americans whom Obama hates so much. And the result will be a reduction in revenue for the government.
James Freeman makes an interesting case on Obama's fiscal cliff.
Eric Hines
I agree that I think Obama is willing to go over the cliff, and I'm worried about how he intends not to waste the ensuing crisis. It does seem a winner for him, so long as he has a compliant media to control the message of who to blame.
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