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Low Taxes = Small Government?

January 23, 2014

They did it. They win. We lose.

People really believe in this mythology. How did this happen?

The story begins with the king, Ronald “starve the beast” Reagan and his chief enforcer, Grover “sign the pledge” Norquist. Loyal princes George “read my lips” Bush and his eponymous son, George “put it on the credit card” Bush are also part of the story. Finally, we mustn’t forget the scary hatchet man, Dick “deficits don’t matter” Cheney.

Yes, these sometimes-popular and always-influential characters have really done a number on us. Reasonable people across the political spectrum now believe that tax cuts lead to small government, that the beast can really be starved. Why not? It makes perfect sense — if the government can’t collect money, how can it grow?

By eating your unborn children.

“Starve the beast” has failed so dramatically, I am at a loss to come up with an appropriate analogy. Maybe a traffic jam from Fort Lee to the redwood forests? A supernova?

Starting in 1980, Republicanism degenerated into worship of a dogma that is as illogical and unworkable as it is unshakeable and unassailable — if we tax the unborn we’ll get small government. Crazy? Yes. But it was not always so.

Real Republicans like Eisenhower and the real conservatives in the B.N. (Before Norquist) Congress were against cutting taxes without cutting spending because it was important to them, as conservatives, to balance the budget. For new projects such as building our interstate highway system, Eisenhower approved new taxes. Budgets were balanced and the discipline of having to raise taxes to fund new spending kept government growth in check.

Ironically, modern Republicans have made it easier to expand government.

Think of it this way: what happens to humans who have a rare condition that prevents them from feeling any pain? Even if these poor souls are extremely careful (such a person can rest her hand on a red hot burner and feel nothing but mild warmth), they end up badly injuring themselves and usually lead short, difficult lives.

Tax increases are painful; as such, they restrain government growth and keep us safe.

The small pre-1980 deficits were irrelevant: national debt as a percent of GDP went down year after year. Then came “starve the beast.” The national debt went from 30% of GDP to 70% by 2008 even including the brief return to fiscal responsibility during the Clinton years. The Great Recession then pushed the national debt above 100% of GDP.

Obama was a teenager in 1980 and no one (not even Fox News) claims he caused the derivatives meltdown of 2008. The problem isn’t Obama. The problem is we used to have conservatives in our government and now we have a Obama’s European Social Democracy party (okay, I renamed it) and a special interest group dedicated to low taxes no matter what that isn’t a legitimate political party at all.

Imagine if Republicans post 1980 had continued to insist that taxes match spending. By 2008, when the crisis hit, the national debt would have been sitting at something like 10% of GDP (this is the only statistic that matters by the way; the dollar amount is irrelevant). We’d be okay now. Instead, we’re back where we were after World War II and it will take a generation to dig out. Thanks a lot, guys.

What would Ike do? He would take away the Republicans’ credit card. “Starve the beast,” aka rich-college-boy conservatism is an unvarnished failure.

Reject it.

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