Budget Outlook
The government-produced chart on the Drudge Report today:
Bill Clinton famously said, "The era of big government is over." John Boehner, commenting on Barack Obama's plan has said "The era of big government is back."
Bill Clinton famously said, "The era of big government is over." John Boehner, commenting on Barack Obama's plan has said "The era of big government is back."
posted by Matthew Canonicus at
10:19 AM
7 Comments:
That's not fair, you know that over a trillion of that is the financial crises bailout that Bush started.
Also, it should be said that during recessions it is natural for tax receipts to decline by a significant amount, which obviously doesn't help. And that Obama has vowed to halve the deficit by the end of his first term (details of his plan are starting to emerge I believe).
Barack Obama is bringing in a big government in a way that Clinton never intended to do.
Look carefully. The BIG bar on the right is the estimated January amount. That big but lesser bar to the left is the Bush bar. Barack has budgeted FAR more money to this bailout than was ever spent on Iraq. There's talk that he's going to spend 4 trillion in stimulus and bailouts over the next three years.
Barack Obama's plan to cut the deficit in half (that's the annual budget) involves massive tax increases. I'm not sure what you mean by a "tax receipt".
My point was that Bush championed the 1+ trillion bank bailout, before Obama was elected or sworn in. It has yet to be factored into a budget, and that's why it's cost will only be included in Obama's first budget (as I understand it). So it's dishonest to say that the bar was all Obama's doing when you consider it would look almost as large if Bush was in office for another year. By tax receipts I mean Government revenue from taxation. During a recession it declines significantly, which adds to the deficit without any politician doing anything. The only part of that bar that is actually Obama is the stimulus plan, which a republican probably would have done anyway (although they would have done it more through tax cuts than Government spending).
So to me, it doesn't sound like big government is back (not that that phrase worries me in any way), just that they are trying to maintain the same size of government in a dramatically worse economic condition.
Hmm ...
So I guess my question would be this: when the economy is doing good and the government starts bringing in more money, does that mean it's natural for the government to lower taxes?
I'm sure we'd disagree on this, but i'd say no. Two reasons:
1) Tax cuts are most of the time very hard to reverse. Governments should be running surpluses in boom times and deficits in recessions. The debt accrued during the recession should be paid off by the surplus in the boom. That way the budget balances itself out over the long run.
2) If, for some reason, the Government receives more income in the long term (i.e. not just an economic boom but a new technology that increases production efficiency) then they can contemplate a tax cut or increased Government spending. Of the two i'd pick Government spending unless the marginal tax rate is suffoctatingly high, and it is not that high in America. Government spending is needed right now for alot of public goods that private industry does not want anything to do with.
So it turns out we are both consistent. I say the government should lower taxes in recession and prosperity, and you say the government should increase taxes in recession and prosperity. The existentialists agree that policy is a matter of personal perspective and not ostenisble circumstance.
The thing about government spending is it is a lot more accurate to instead say 'government wasting' because it throws it on businesses that should be failing. See my post on the Grace Commission. Of it's 'charitable' intentions (as if the government could "love"), 80%+ of Americans believe faith-based organizations could do better. 80%!
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