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May 4, 2006

Cutting Taxes Brings MORE Government

-- by Dave Johnson

The so-called "conservatives" have been cutting taxes in an effort to, as they call it, "starve the beast." Ronald Reagan explained the "starve the beast" argument as "cutting the government's allowance." The idea is that by bankrupting the government (us, you and me), we're forced to stop spending money on ... well, on negroes is the historical root of their underlying argument. They call it "welfare" and "entitlements" (even though entitlements means Social Security...) and affirmative action. That's what "big government" means to conservatives. (Never mind that most government spending goes to military and interest on the massive Republican debt...)

But what about this idea that bankrupting the government (us, you and me) through tax cuts forces spending cuts? Political Animal links today to a very interesting counter-argument, Stoking the Beast. Basically, that by cutting the cost what they have actually done is increased demand. The public is not feeling the effects of the massive Republican borrowing, so the public perception is that government just costs less. They're getting government services and not paying as much in taxes as it really all costs, so why not get them some more of that?

One more thing these assclowns turned out to be incompetent at.

Posted by Dave Johnson at May 4, 2006 1:27 PM

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I fear that Kevin Drum and Dave Johnson are looking at the wrong time horizon when they respond to the Cato Institute reporting that annual budget deficits seem to increase government spending, and therefore starve the beast is wrong. Leaving aside the... [Read More]

Tracked on May 6, 2006 6:15 PM

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Comments

Recently I was reading Billmon on the subject of gold prices going through the roof. He likened the fiscal situation of the US federal government to that of Enron, and for this reason, some foreign governments are trading in their dollar reserves for gold instead. This is frightening for our future economic outlook. The European banks have been warning us for some time that we can not continue to neglect our borrowing habits much longer and every year we find ourselves substantially deeper in the hole.

Some time back, Ron Paul wrote an essay/speech called "The end of Dollar hegemony" that was also quite enlightening. This is before gold shot up over $600 an ounce. Its nearing the $700 mark now... (closed at $674.20 today.)

If anyone's interested in connecting these dots, read this stuff.

Here's the Billmon piece

Here's Ron Paul's piece

Posted by: Randy Holm [TypeKey Profile Page] at May 4, 2006 2:40 PM

Your blog is not interesting, mainly whining and nothing to really respond to.

Posted by: Mary Ann [TypeKey Profile Page] at May 4, 2006 2:50 PM

Except... Americans are not paying less. Extremely rich people are paying less - and certainly getting more.

Everyone else is paying much the same as they were before in federal taxes, as much or more in state/local taxes, and much more in various fees.

Posted by: Avedon [TypeKey Profile Page] at May 6, 2006 10:09 AM

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