Admitting We Were Wrong
From my latest essay:
The two viewpoints might be summarized as follows:
–Conservatives: Cutting taxes will help reduce the size of government.
–Liberals: Big government is not really so bad.
In the face of overwhelming evidence over the past five years, conservatives like Hassett and me have to admit that we were wrong. Cutting taxes did not help to reduce the size of government.
A commenter on the piece pointed to this essay:
the new glue that cemented the three legs of the governing coalition was no longer the original intent intellectual movement, but an expanded federal government in Republican hands. The era of “big government is over” was over.
Jeff Frankel emails that his position is that studying economics influences one in the direction of classical liberalism.
The label I would prefer for the last 5 Republican presidents is not conservative but ‘illiberal.’…And I don’t
consider myself on the left…I am equally or more committed to fiscal discipline, monetary discipline, and free trade, than good Republican economists like Mankiw, Hubbard, and Bernanke.
Peter Diamond emails
when I think about the federal budget I think the govt spends too much on some programs and too little on others. I suspect that is a near universal among analysts, although people obviously disagree on which is which. Whether in aggregate the govt spends more than I would if I were czar is a meaningless question. The right question is to consider which programs would change with a change in an overall budget and see how such a change would affect the mix…
In other words, if you were going to increase (reduce) the level of government by $X, the question should be whether at the margin $X would be on good programs or bad programs.
I should say that I have always preferred to go after spending head-on, rather than attempt to use tax cuts as an indirect lever. I stand by what I wrote eighteen months ago.
If you gave me a blindfold and asked for my analysis of the Bush tax cuts, I would say that they trouble me in the context of the Administration’s failure to address entitlement spending. Because the President has not touched the long-term Medicare and Social Security deficits — other than to add to them with the prescription drug benefit — I find it quite offensive that he wishes to claim credit for cutting taxes. Long term, he has done no such thing.
A President who has only added to future entitlement obligations ought to be judged as having acted to increase taxes. To call this Administration a tax cutter is like [calling] a spoiled kid who does not touch dinner but takes a double portion of chocolate cake for dessert a “good eater.”