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Home Publications Blogs Beat the Press Tax Cuts Didn't Starve Discretionary Spending, Votes to Cut Discretionary Spending Starved Discretionary Spending

Tax Cuts Didn't Starve Discretionary Spending, Votes to Cut Discretionary Spending Starved Discretionary Spending

Thursday, 26 June 2014 04:08

A NYT editorial on Senator Thad Cochrane's narrow victory in a Republican primary criticized his record:

"He has consistently voted for the kinds of tax cuts that have starved discretionary spending and held down the economic recovery."

This is incorrect. There is no direct relationship between the tax cuts Mr. Cochrane has supported and the cuts in discretionary spending that Congress and President Obama agreed to. The cuts came about because of a commitment to hit arbitrary deficit targets. Given the vast amount of unemployment and underemployment in the economy, there is no reason to be reducing the deficit. There is no reason that we could not have both maintained higher levels of discretionary spending and left the tax cuts in place.

It is important to be clear on this issue since the public needs to know that the main factor slowing growth and keeping millions of people out of work is simply a perverse cult of low deficits, not the need to raise taxes on anyone.

Comments (8)Add Comment
Bring Back the Good Old Days of the Great Depression: Vote Out Cochrane
written by Last Mover, June 26, 2014 6:03

The power of the austerian zero-sum mindset boggles the mind. The point made about trading off tax cuts with more discretionary spending is not about deficit funded fiscal stimulus spending.

It's about things like more food stamps that could have been funded with less selective tax cuts for the rich by Cochrane on a deficit neutral basis. However the NYT editorial does deserve credit for assuming the tax cuts in question don't stimulate spending and reduce unemployment.

Wailing and knashing of teeth from right wing extremists is at a fever pitch on this one because black Democratic voters themselves moved to cannibalize the Republican primary and vote in the lesser evil.

And what do the wailers do? Blame the voters of course for being so savvy to pull off what economic predators usually do as they run the country into the ground. Not this time. The lesser predator won.

Stupid black voters just can't understand how bad Cochrane has been to them can they. The country is going to hell in an economic handbasket and they keep voting for grim reapers like Cochrane who take it there.

Any reasonable voter should be able to see what the Tea Party candidate was proposing, as in:
He spoke to a group called the Sons of Confederate Veterans, and when criticized for it, sprang to the group’s defense. “It’s a historical organization filled with re-enactors and collectors,” he said. “That’s all it is.”

What's wrong with these voters? Can't they see Cochrane's opponent just wants to re-enact the Great Depression through some zero-sum austerian tradeoffs and get some character building going on?
written by Kat, June 26, 2014 8:55
It seems to me this bit of loser liberalism is a legacy of the Clinton presidency. We need to stamp this out. I am fairly certain that explaining to friends and family that there was nothing responsible about his budget surpluses is not doing the trick. To this end I propose that all citizens chip in a few dollars and pay the Clintons to retire from public life (no corporate boards and speaking gigs allowed either). It has already been established that they can be bought. We're just negotiating a price now.
written by bananaguard, June 26, 2014 10:33
Last Mover,

You have pointed out what is really a huge bit of hypocrisy among the rightest of the right wing. They have condemned black voters for voting in a GOP primary, despite the fact that doing so is entirely legal in Mississippi. Voting is meant to be a way of expressing one's political views effectively. Election fixers are outraged because the vote in Mississippi did what the Founders meant for it to do, rather than what the corrupters of democracy hoped it would do. They wanted black voters disenfranchised, but black voters found a way to un-disenfranchise themselves. All this voter ID stuff and intimidation failed. The election fixers are foaming and fuming because blacks had an influence on an election in Mississippi.
Taxes do not fund the federal government.
written by Benedict@Large, June 26, 2014 12:56
Taxes have nothing to do with spending. The linkage is a remnant of the gold standard and no longer applies when a sovereign fiat currency is used. The linkage is a FRAUD, and is only being maintained as a way of crushing the social safety net.
written by david s, June 26, 2014 1:08
The Clinton Administration was able to convince much of the public that it was the surpluses in the late 1990s that caused the good economy.

I still hear Democrats brag about those surpluses.

The Clinton Administration did so much lasting economic damage to this country.
written by bananaguard, June 26, 2014 1:48
Clinton ran surpluses at a time when surpluses made more sense than they do now. The fact that he made political hay out of doing what the GOP always claimed to want to do, but has never done, is problematic. His surpluses weren't problematic. Well, not till Bush got hold of them.
Bull's-eye: "Taxes do not fund the federal government."
written by Nat Uerlich, June 26, 2014 4:00
If the comment by Benedict@Large doesn't make sense to you, watch this interview of economist Stephanie Kelton for a paradigm-shifting half hour: http://www.youtube.com/watch?v=mCOVldiGeQY .
written by david s, June 27, 2014 6:21
If you are a reader of CEPR Beat the Press, you would understand that the Clinton Administration should not have run those surpluses at the time.

Yes, it makes more sense to cut deficits when the economy is hot than when it is cold, but with a .5 trillion dollar trade deficit every year, budget surpluses don't make sense for the US. They force the private sector into unsustainable debt.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.