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It’s easy to blame progressives for their spending spree (GWB certainly did it). But I’ve often said that it’s really the majority of the American people who are responsible. They keep electing people to Congress who will not face up to responsible action, for fear of being voted out of office. There was a time that I, and many others, believed that if we just keep cutting taxes, we would limit the out of control spending.
Andrew Ferguson’s article in The Weekly Standard Gorging The Beast makes a very reasoned case that “Tax cuts didn’t starve big government.”
He cites Milton Friedman who wrote.
I believe there is one and only one way: the way parents control spendthrift children, by cutting their allowance.
But there’s a big difference, between a kid on an allowance and the federal government: The government has a credit card with no debt limit.
As long as a majority of the people who get benefits from the Government don’t feel the pain of higher taxes, there’s no cry out there to reduce money spent on “free stuff.”
So it may be that the only way to really reduce the spending is to raise taxes on the vast middle class. Then, and only then, might they start getting serious about living on less.
Here are the 2 key paragraphs:
Reagan, Friedman had counted on something that never materialized. They had assumed that as the debt piled up to finance annual budget deficits caused by free-flowing benefits, public outrage would force politicians to restrain spending without raising taxes. Yet we’ve had the deficits and the borrowing, in amounts that would have left Friedman and Reagan agog; what’s been missing is the outrage.
As compelling as Niskanen’s critique is, he was less persuasive in explaining the flip side of his findings. Why do tax increases lead to decreased spending? “Demand by current voters for federal spending,” he explained, “declines with the amount of this spending that is financed by current taxes.” When you make them pay for government benefits out of their own pockets, in other words, voters will want fewer of them. The journalist Jonathan Rauch put Niskanen’s point more pithily: “Voters will not shrink Big Government until they feel the pinch of its true cost.”
Any homeowner can appreciate what’s going on. A responsible lender will not allow you to accrue too much debt in proportion to your potential income. Obama’s economic philosophy is driving him to want tax increases to increase revenue to keep pace with spending.