Tuesday, May 03, 2011
Ezra Klein's claim that the 2001 and the 2003 tax cuts were the two biggest contributors to the federal budget deficit...
How in the world do you justify that position?
The 'deficit' is the amount by which spending exceeds revenue ('surplus' is the amount by which revenues exceed expenditures, a condition never to be seen again).
Government revenues were higher in 2010 than they were in 2000, the year before the 2001 cuts. Not a whole lot higher, but higher nonetheless.
Given that revenues went up, the only way that we could have ended up in a deficit situation is if spending had gone by an even larger amount.
And that is exactly what happened.
The ONLY way one can rationalize Klein's view is by starting from the position that increases in spending are both a given and always justified and thus revenues have to go up by at least the same amount to keep pace... and if revenues don't go up by that amount, the fault lies with the revenue side of the budget and not with the spending side.
Now how screwed up a view is that?