# More tax cuts and less spending? **URL:** \ **Category:** Great Debates\ **Created:** [September 18, 2005, 3:27pm UTC](https://boards.straightdope.com/t/more-tax-cuts-and-less-spending/322220 "2005-09-18T15:27:47Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![Johnny\_L.A](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/johnny_l.a/32/1084_2.png) [@Johnny\_L.A](https://boards.straightdope.com/u/Johnny_L.A)\ **Post date:** [September 18, 2005, 3:27pm UTC](https://boards.straightdope.com/t/more-tax-cuts-and-less-spending/322220/1 "2005-09-18T15:27:47Z")
President Bush announced that he will not raise taxes, and that tax cuts are necessary to stimulate the economy. He says that the government can reduce spending. But Tom DeLay has said that there’s no more fat to cut. The President, according to CNN, has delivered a budget that is already as lean as it can get. Given that the war in Iraq is still being fought, and that Hurricane Kartina is going to cost gobs of money, where will the money come from? Taxes from new or expanding businesses? I’ve been talking to a couple of people in the L.A. area, and they say that it’s tough to get a job down there and that housing prices are horrendous. Up here in the PNW I’ve been unemployed for nine months. (I am, however, pursuing videography. Not making any money at it yet, except on paper.) If high-paying jobs were being created, I could see how more taxes would be paid. But with so many people out of work, with so many people whose jobs were outsourced being forced to flip burgers or become greeters at Wal-Mart, with tens of thousands of New Orleansians being displaced and looking for work, I’m not seeing high-paying jobs. If I heard CNN correctly, then more than half of people surveyed said that they would willingly pay higher taxes. But Bush says that taxes will not be raised. So where does the money come from? (Note: I’m not debating here. This is actually a GQ. But I know it will turn into a debate so I’m posting here.) ---
**Author:** ![Der\_Trihs](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/der_trihs/32/233_2.png) [@Der\_Trihs](https://boards.straightdope.com/u/Der_Trihs)\ **Post date:** [September 18, 2005, 3:46pm UTC](https://boards.straightdope.com/t/more-tax-cuts-and-less-spending/322220/2 "2005-09-18T15:46:26Z")
I expect Bush will try to spend yet more money we don’t have, in hopes of creating an even higher national debt and an economic collapse that will force the country to give up most of it’s government services, as well as pushing wages lower. “Starving the Beast” is not a new idea; the Right _wants_ as large an economic disaster as possible, because they know people will never willingly give up the social programs they hate so much. Therefore, the Right wants to pull the house down; create such a massive disaster that the government won’t have the money for food stamps or social security or the EPA. ---
**Author:** ![Squink](https://avatars.discourse-cdn.com/v4/letter/s/b5e925/32.png) [@Squink](https://boards.straightdope.com/u/Squink)\ **Post date:** [September 18, 2005, 3:52pm UTC](https://boards.straightdope.com/t/more-tax-cuts-and-less-spending/322220/3 "2005-09-18T15:52:00Z")
> [@](#): > > House Republicans are looking at delaying some federal spending, including money for a prescription drug benefit under Medicare and thousands of highway projects, to offset the cost of rebuilding the Gulf Coast, a leading GOP fiscal conservative said Sunday. [House GOP Seeks to Offset Katrina Spending](http://news.yahoo.com/s/ap/20050918/ap_on_go_co/katrina_spending) To the extent that they don’t cut programs, they’ll just pass the bill onto our children. Given their dishonesty about the fiscal incontinence of the last **five** years: > [@](#): > > “We haven’t been disciplined enough over the last 10 years. We need to do that, and we needed to do that before Katrina. We still need to do that over the medium and long term,” Vitter said. I expect our children will have to pay for most of it. ---
**Author:** ![treis](https://avatars.discourse-cdn.com/v4/letter/t/bc79bd/32.png) [@treis](https://boards.straightdope.com/u/treis)\ **Post date:** [September 18, 2005, 3:58pm UTC](https://boards.straightdope.com/t/more-tax-cuts-and-less-spending/322220/4 "2005-09-18T15:58:44Z")
Last 10 years? I think he mispoke and meant the last 5 years. The US was running a surplus 6 years ago if I am not mistaken. ---
**Author:** ![Wesley\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wesley_clark/32/20581_2.png) [@Wesley\_Clark](https://boards.straightdope.com/u/Wesley_Clark)\ **Post date:** [September 18, 2005, 4:01pm UTC](https://boards.straightdope.com/t/more-tax-cuts-and-less-spending/322220/5 "2005-09-18T16:01:16Z")
We’ll borrow it and increase the national debt. As Der Trihs said this is most likely part of a plan to starve the beast, to keep the deficit as high as possible and refuse to raise taxes so that the government has no choice but to cut government spending. ---
**Author:** ![Johnny\_L.A](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/johnny_l.a/32/1084_2.png) [@Johnny\_L.A](https://boards.straightdope.com/u/Johnny_L.A)\ **Post date:** [September 18, 2005, 4:07pm UTC](https://boards.straightdope.com/t/more-tax-cuts-and-less-spending/322220/6 "2005-09-18T16:07:51Z")
> [@Der Trihs](#): > > I expect Bush will try to spend yet more money we don’t have, in hopes of creating an even higher national debt and an economic collapse that will force the country to give up most of it’s government services, as well as pushing wages lower. “Starving the Beast” is not a new idea; the Right _wants_ as large an economic disaster as possible, because they know people will never willingly give up the social programs they hate so much. Therefore, the Right wants to pull the house down; create such a massive disaster that the government won’t have the money for food stamps or social security or the EPA. > [@Wesley Clark](#): > > We’ll borrow it and increase the national debt. As Der Trihs said this is most likely part of a plan to starve the beast, to keep the deficit as high as possible and refuse to raise taxes so that the government has no choice but to cut government spending. Far be it from _me_ to put it past the Administration from doing such a thing, but I can’t see them intentionally harming the country to further their aims. With more and more people reaching retirement age, and more and more people requiring medical care, it seems as if this strategy would backfire. ---
**Author:** ![asterion](https://avatars.discourse-cdn.com/v4/letter/a/4da419/32.png) [@asterion](https://boards.straightdope.com/u/asterion)\ **Post date:** [September 18, 2005, 4:20pm UTC](https://boards.straightdope.com/t/more-tax-cuts-and-less-spending/322220/7 "2005-09-18T16:20:30Z")
> [@treis](#): > > Last 10 years? I think he mispoke and meant the last 5 years. The US was running a surplus 6 years ago if I am not mistaken. A paper surplus only. Requiring the effects of the peace dividend, the rollout of new technology, and an unsustainable technology boom. ---
**Author:** ![Dangerosa](https://avatars.discourse-cdn.com/v4/letter/d/22d042/32.png) [@Dangerosa](https://boards.straightdope.com/u/Dangerosa)\ **Post date:** [September 18, 2005, 4:22pm UTC](https://boards.straightdope.com/t/more-tax-cuts-and-less-spending/322220/8 "2005-09-18T16:22:29Z")
> [@treis](#): > > Last 10 years? I think he mispoke and meant the last 5 years. The US was running a surplus 6 years ago if I am not mistaken. Just to be fair, that surplus had more to do with a booming economy (and some discipline in spending) than it had to do with brilliant policy decisions by anyone in government. Not that we didn’t manage it well over five years through monetary policy, but it was as much luck that Clinton was president during a boom as anything. But more tax cuts is not my idea of good fiscal policy for the moment. In fact, it seems rather counterproductive. Rebuilding NO will be an economic stimulus in itself, together with war expenses, that should mean we don’t need individuals to spend more - seems like the government will do a fine job of spending more. Plus tax cuts as policy are notoriously inefficient. ---
**Author:** ![Der\_Trihs](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/der_trihs/32/233_2.png) [@Der\_Trihs](https://boards.straightdope.com/u/Der_Trihs)\ **Post date:** [September 18, 2005, 4:29pm UTC](https://boards.straightdope.com/t/more-tax-cuts-and-less-spending/322220/9 "2005-09-18T16:29:10Z")
> [@Johnny L.A.](#): > > Far be it from me to put it past the Administration from doing such a thing, but I can’t see them intentionally harming the country to further their aims. With more and more people reaching retirement age, and more and more people requiring medical care, it seems as if this strategy would backfire. To people like this, “the country” = the rich. Wealthy people and large companies are transnational these days; they have plenty of property and money overseas. They don’t care in the slightest about the common people. In fact, IIRC Bush himself once referred to his constituency as “the haves and have mores” Besides, part of the point in being rich for certain people is being better off and more powerful than other people, not in enjoying what you have. An economic crash will hurt the common people worse, and increase the gap between rich and poor even more. They rich will have less in absolute terms, but have more relative to the non rich. In other words, before the collapse a rich guy has 50 million in the bank and I have a few thousand. After the collapse, he has 10 million and I have nothing. Most importantly, the neocons are _ideologically_ devoted to lower taxes and less government service, at any cost. These are people who will cheerfully eliminate national disaster relief if they can, and if thousands or millions die that’s just too bad. The neocons have never, ever shown any concern for the American people. ---
**Author:** ![Wesley\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wesley_clark/32/20581_2.png) [@Wesley\_Clark](https://boards.straightdope.com/u/Wesley_Clark)\ **Post date:** [September 18, 2005, 5:24pm UTC](https://boards.straightdope.com/t/more-tax-cuts-and-less-spending/322220/10 "2005-09-18T17:24:03Z")
> [@Johnny L.A.](#): > > Far be it from _me_ to put it past the Administration from doing such a thing, but I can’t see them intentionally harming the country to further their aims. With more and more people reaching retirement age, and more and more people requiring medical care, it seems as if this strategy would backfire. Well they aren’t harming the country in their view. In their view they are getting rid of government funding for programs that the government shouldn’t be supporting anyway and switching these programs over to the private sector. Raising taxes would just allow more programs to exist, cutting taxes and only allowing money to be had by borrowing forces the private sector to pick up the tab. ---
**Author:** ![Fear\_Itself](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fear_itself/32/19637_2.png) [@Fear\_Itself](https://boards.straightdope.com/u/Fear_Itself)\ **Post date:** [September 18, 2005, 5:36pm UTC](https://boards.straightdope.com/t/more-tax-cuts-and-less-spending/322220/11 "2005-09-18T17:36:25Z")
> [@Wesley Clark](#): > > Well they aren’t harming the country in their view. In their view they are getting rid of government funding for programs that the government shouldn’t be supporting anyway and switching these programs over to the private sector. Raising taxes would just allow more programs to exist, cutting taxes and only allowing money to be had by borrowing forces the private sector to pick up the tab. But they aren’t cutting spending! Which is more virtuous, profligate spending funded by increasing taxes, or profligate spending by funded by borrowing from foreign countries? ---
**Author:** ![Wesley\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wesley_clark/32/20581_2.png) [@Wesley\_Clark](https://boards.straightdope.com/u/Wesley_Clark)\ **Post date:** [September 18, 2005, 5:40pm UTC](https://boards.straightdope.com/t/more-tax-cuts-and-less-spending/322220/12 "2005-09-18T17:40:01Z")
Increasing taxes. However I think the goal in the long run is to force spending cuts by creating a huge deficit even if in the short run that doesn’t happen. ---
**Author:** ![Johnny\_L.A](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/johnny_l.a/32/1084_2.png) [@Johnny\_L.A](https://boards.straightdope.com/u/Johnny_L.A)\ **Post date:** [September 18, 2005, 5:40pm UTC](https://boards.straightdope.com/t/more-tax-cuts-and-less-spending/322220/13 "2005-09-18T17:40:39Z")
> [@Wesley Clark](#): > > Well they aren’t harming the country in their view. In their view they are getting rid of government funding for programs that the government shouldn’t be supporting anyway and switching these programs over to the private sector. Raising taxes would just allow more programs to exist, cutting taxes and only allowing money to be had by borrowing forces the private sector to pick up the tab. This is where my opinion differs from theirs. I believe that healthy, educated, well-rounded people are good for the country. Thus I support National Health care because people who are healthy are more productive (who therefore pay more taxes and are thus better for the country) are better for the country than people who are unhealthy. It’s been shown that catching medical problems early means that it’s less expensive to care for patients than if they are caught later. And I believe that more money should be spent on schools – including higher education – because educated people tend to make more money than uneducated ones. In addition, it makes the country more competitive with other countries. By ‘well-rounded’, I mean that people who know more than the ‘three Rs’. I believe that people who are exposed to the Arts, foreign cultures, etc. are better suited to running our economy and our country. I think that people who have a well-rounded world-view, in addition to such education as critical thinking, are less likely to get us into (or support) policies that are detrimental to the country. In addition I believe that people who make money are less likely to commit crimes or abuse drugs. (Not that they won’t; just that they’re less likely to.) This is also good for the country. So I support programmes that aim to break the cycle of poverty, and to assist people who need assistance. Less poverty is good. So I think that ‘starving the beast’ is bad for the country. Sort of a tangent from the OP, but there it is. ---
**Author:** ![Wesley\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wesley_clark/32/20581_2.png) [@Wesley\_Clark](https://boards.straightdope.com/u/Wesley_Clark)\ **Post date:** [September 18, 2005, 5:44pm UTC](https://boards.straightdope.com/t/more-tax-cuts-and-less-spending/322220/14 "2005-09-18T17:44:29Z")
I agree. I don’t support a libertarian world or tax cuts, I support responsible government that is designed to provide opportunities to the people who live there. However with the incessant scream of ‘we need more tax cuts’ I think people have been indoctrinated with the idea of hating any kind of tax increase to pay for the stuff, even if the tax increase means they’ll spend less money privately for healthcare and education. So I don’t see those things happening soon. ---
**Author:** ![jshore](https://avatars.discourse-cdn.com/v4/letter/j/b5e925/32.png) [@jshore](https://boards.straightdope.com/u/jshore)\ **Post date:** [September 18, 2005, 6:00pm UTC](https://boards.straightdope.com/t/more-tax-cuts-and-less-spending/322220/15 "2005-09-18T18:00:27Z")
> [@asterion](#): > > A paper surplus only. Requiring the effects of the peace dividend, the rollout of new technology, and an unsustainable technology boom. Although somehow, Bush, the Republicans in Congress and Alan Greenspan all believed…or pretended to believe…that it was real. And, Alan Greenspan is still taken very seriously by a large spectrum of people and the political pundits even though he has never owned up to what was either an idiotic blunder or a horrific deception. ---
**Author:** ![treis](https://avatars.discourse-cdn.com/v4/letter/t/bc79bd/32.png) [@treis](https://boards.straightdope.com/u/treis)\ **Post date:** [September 18, 2005, 6:12pm UTC](https://boards.straightdope.com/t/more-tax-cuts-and-less-spending/322220/16 "2005-09-18T18:12:53Z")
> [@asterion](#): > > A paper surplus only. Requiring the effects of the peace dividend, the rollout of new technology, and an unsustainable technology boom. It doesn’t matter how the surplus was formed the point is that we didn’t go out and blow it. That is what fiscal responsibilty entails. ---
**Author:** ![asterion](https://avatars.discourse-cdn.com/v4/letter/a/4da419/32.png) [@asterion](https://boards.straightdope.com/u/asterion)\ **Post date:** [September 18, 2005, 6:20pm UTC](https://boards.straightdope.com/t/more-tax-cuts-and-less-spending/322220/17 "2005-09-18T18:20:45Z")
> [@jshore](#): > > Although somehow, Bush, the Republicans in Congress and Alan Greenspan all believed…or pretended to believe…that it was real. > > And, Alan Greenspan is still taken very seriously by a large spectrum of people and the political pundits even though he has never owned up to what was either an idiotic blunder or a horrific deception. I never bought into the surplus. I paid no attention whenever that was brought up in 2000, and besides, it was becoming painfully obvious that the market was dropping and the boom that was creating the surplus was over. ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [September 18, 2005, 8:10pm UTC](https://boards.straightdope.com/t/more-tax-cuts-and-less-spending/322220/18 "2005-09-18T20:10:16Z")
> [@Johnny L.A.](#): > > President Bush announced that he will not raise taxes, and that tax cuts are necessary to stimulate the economy. He says that the government can reduce spending. Bear in mind that this comes from the first president in American history – AFAIK, the first national leader in modern history, anywhere – who decided to cut taxes right at the start of a war. :rolleyes: ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [September 18, 2005, 8:28pm UTC](https://boards.straightdope.com/t/more-tax-cuts-and-less-spending/322220/19 "2005-09-18T20:28:16Z")
> [@jshore](#): > > And, Alan Greenspan is still taken very seriously by a large spectrum of people and the political pundits even though he has never owned up to what was either an idiotic blunder or a horrific deception. Or both at once. Here’s a recent article by William Greider “The One-Eyed King,” from _The Nation,_ 9/19/05, that well sums up Greenspan’s 18-year tenure and legacy: [http://www.thenation.com/doc/20050919/greider](http://www.thenation.com/doc/20050919/greider) > [@](#): > > The weak-willed economy is an apt illustration of where Greenspan’s lopsided policies have led. Four years after the 2001 recession ended, the economy is still struggling to overcome its “jobless” recovery (or “job-loss” recovery, as manufacturing unions call it). Corporate profits have rebounded to extraordinary levels, but companies are reluctant to invest the capital. Wages, meanwhile, remain flat or falling, especially for working-class occupations. Forty-six months into this expansion cycle, the total hours worked in nonsupervisory jobs have risen only 2 percent since the recession ended–compared with rebounds of 9-16 percent after the four previous recessions. Manufacturing, once the vital core of US prosperity, is still losing jobs every month. Its total working hours are down 9 percent since 2001. > > This is the most sluggish recovery on record, which seems to puzzle the Fed chairman. But it reflects the Greenspan style of running things; he presided over a similarly tepid recovery in the early 1990s. Tom Schlesinger, director of the Financial Markets Center, a monetary-policy watchdog, thinks the lopsided economy is the most disturbing hallmark of Greenspan’s governance. “The Fed has said almost nothing about this, except [vice chairman] Roger Ferguson says there’s nothing the Fed can do particularly,” Schlesinger complains. “The jobless recovery appears to be a new feature of the US business cycle. Yet the principal agent of economic management says nothing.” > > In fact, Americans seem to be confronted with the very conditions Keynes warned against: an economy performing, more or less permanently, far below its potential. That situation proves satisfactory for the affluent and for business enterprise, since wage pressures are muted, but it makes life insecure or miserable for most everyone else. The logical response is a fundamental policy shift in favor of work and wages–boosting incomes and demand–but that approach would require taboo measures from the Keynesian past that even most Democrats don’t understand or support. > > Meanwhile, the financial froth of speculative bubbles–and their dangers–are another enduring legacy of the Greenspan era. “Irrational exuberance really is still with us,” Robert Shiller wrote in the new, revised edition of his book. Notwithstanding the earlier meltdown, the stock market remains dangerously overvalued by historical measures, Shiller warns, and is now accompanied by dramatic price inflation in real estate. These two bubbles are false valuations by markets and will burst sooner or later. Shiller urges investors to recognize the “risk that in 2010 or even 2015, the stock market will be lower still in real, inflation-corrected terms, than it was in 2005.” > > Why do these financial delusions keep arising among investors? Shiller describes many causes, and they include Alan Greenspan’s Fed. The chairman’s earnest solicitude for financial markets, Shiller explains, contributed to the “gold rush” psychology, convincing financial players that the central bank would always come to their rescue and never turn against them. Their sloppy exuberance is the opposite of the manly competitive ethos and market discipline preached by Greenspan and the right. Worse, it is bound to injure innocent people. “Things happen during a speculative bubble that can ruin people’s lives,” Shiller noted. “Little will be done to stop these things if public figures consider themselves beholden to some overarching efficient markets principle and do not even recognize over-speculation as a real phenomenon.” > > The specter of deflation is, meanwhile, still hanging over the United States. Greenspan initially took dramatic action to avoid the same fate Japan suffered after its financial bubble collapsed in 1990–a low-grade depression and a decade of sputtering stagnation. Cutting interest rates to near zero, the Fed succeeded, at least for the short run. But unless the economy gains more normal balance and energies in the next year or so, the United States may yet be facing the same ditch. The problem, explains William Gross, managing director of PIMCO, a major bond investment house, is that long-term rates have already fallen about as far as they can in real terms. “The Fed may soon be running out of fuel,” Gross warns. “If the asset pumps run dry and the kerosene cans empty, the inevitable path of the US economy will reflect slow growth at best and recession as a realistic alternative.” ---
**Author:** ![Dangerosa](https://avatars.discourse-cdn.com/v4/letter/d/22d042/32.png) [@Dangerosa](https://boards.straightdope.com/u/Dangerosa)\ **Post date:** [September 18, 2005, 10:07pm UTC](https://boards.straightdope.com/t/more-tax-cuts-and-less-spending/322220/20 "2005-09-18T22:07:09Z")
> [@Johnny L.A.](#): > > This is where my opinion differs from theirs. I believe that healthy, educated, well-rounded people are good for the country. Thus I support National Health care because people who are healthy are more productive (who therefore pay more taxes and are thus better for the country) are better for the country than people who are unhealthy. … > > Sort of a tangent from the OP, but there it is. To continue your tangent, I’ve come to believe that we need to nationalize healthcare, not in order to insure the uninsured (though that would be nice) but to be able to compete in the globalized economy. Corporations who employ in the U.S. have to add healthcare costs onto wages. Corporations who employ in Canada have the Canadian government picking up the health care tab. A lot of the rest of the world has health care coverage provided by their governments. Obviously, a socialized health care tab isn’t free. But it sure seems attractive to employers to spread that cost out and cut out insurance company profits (perhaps replacing them with government inefficiencies - but I’ve worked for a big health insurance company - the government would have to be good to waste money any faster). I’ve heard several talk about health care costs when they talk about offshoring. [Next page](https://boards.straightdope.com/t/more-tax-cuts-and-less-spending/322220.md?page=2)