Responding to the liberals at the Arkansas Times concerning tax policy

Spending Restraint, Part I: Lessons from Ronald Reagan and Bill Clinton

Uploaded by on Feb 14, 2011

Ronald Reagan and Bill Clinton both reduced the relative burden of government, largely because they were able to restrain the growth of domestic spending. The mini-documentary from the Center for Freedom and Prosperity uses data from the Historical Tables of the Budget to show how Reagan and Clinton succeeded and compares their record to the fiscal profligacy of the Bush-Obama years.

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On 9-18-12 I noted on the Arkansaas Times Blog:

The federal government has how much money? Negative 16 trillion I believe. How can they pay for all our medical needs in the future without turning everything around on us at the state level? I guess liberals are the only ones dumb enough to believe Obama’s empty promises. He took over when there was a federal debt of around 10 trillion and now it is over 16 trillion. I guess we could do even better if we gave him his Obamacare and re-elected him. The only alternative is to elect a Republican House and Senate and President and kill Obamacare. I sure that sounds heartless to the liberals. Everything is working so good right now why change course.

Couldn’t be better responded with a good point,  “Interesting, Saline, that Republicans ran up that $10 trillion in the national debt during good times when they should have been paying it down or totally writing it off.”

I totally agree that Republicans have also had a lot to do with running up the debt. They have got us into wars that we have not budgeted for and we continue to pay for Japan and Germany’s defenses when they are wealthy enough to do it on their own.

However, what is the answer to getting us out of this budget mess? Is raising taxes the answer? Let’s see what the Clinton Administration had to say about that. Below is the last portion of an article by Dan Mitchell of the Cato Institute:

Debunking Myth after Myth in Financial Times Column by Former Clinton White House Economist
September 18, 2012 by Dan Mitchell

Even though I have remarked on many occasions that the burden of government was reduced during the Clinton years, that doesn’t mean Bill Clinton was in favor of smaller government. And it definitely doesn’t mean that his appointees believed in economic liberty.

Consider the case of Laura Tyson, who served as Chair of Clinton’s Council of Economic Advisers. She recently penned a column for the UK-based Financial Times that is riddled with disingenuous assertions.

Even though it deserves to be ignored, I can’t resist the temptation to make corrections.

Tyson myth:

The US economy needs efficient and progressive tax reform and it needs more revenues for deficit reduction. Revenue increases have been a significant component of all major deficit-reduction packages enacted over the past 30 years.

Factual correction:

This is remarkable. I assume Ms. Tyson reads the New York Times, so perhaps she overlooked or deliberate forgot the column that inadvertently revealed that the only successful deficit-reduction package in recent memory was the one that cut taxes instead of raising them.

Interestingly, that successful package was implemented during the Clinton years, but only after she left office.

During Tyson’s tenure at CEA, we did get a tax increase rather than a tax cut. But the Clinton Administration admitted 18 months later that the tax hike was a failure and was not going to balance the budget.

Yet she wants to push the same failed class-warfare tax policy today.

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Spending Restraint, Part II: Lessons from Canada, Ireland, Slovakia, and New Zealand

Uploaded by on Feb 22, 2011

Nations can make remarkable fiscal progress if policy makers simply limit the growth of government spending. This video, which is Part II of a series, uses examples from recent history in Canada, Ireland, Slovakia, and New Zealand to demonstrate how it is possible to achieve rapid improvements in fiscal policy by restraining the burden of government spending. Part I of the series examined how Ronald Reagan and Bill Clinton were successful in controlling government outlays — particularly the burden of domestic spending programs. http://www.freedomandprosperity.org

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