Tuesday, July 13, 2010


That's essentially the argument made on George W. Bush's behalf by the Heritage Foundation's Brian Riedl in this Wall Street Journal op-ed:

President Obama and congressional Democrats are blaming their trillion-dollar budget deficits on the Bush tax cuts of 2001 and 2003. Letting these tax cuts expire is their answer. Yet the data flatly contradict this "tax cuts caused the deficits" narrative....

I've analyzed CBO's 28 subsequent budget baseline updates since January 2001. These updates reveal that the much-maligned Bush tax cuts, at $1.7 trillion, caused just 14% of the swing from projected surpluses to actual deficits....

The bulk of the swing resulted from economic and technical revisions (33%), other new spending (32%), net interest on the debt (12%), the 2009 stimulus (6%) and other tax cuts (3%).

...the wars, tax cuts and the prescription drug program were implemented in the early 2000s, yet by 2007 the deficit stood at only $161 billion. How could these stable policies have suddenly caused trillion-dollar deficits beginning in 2009? (Obviously what happened was collapsing revenues from the recession along with stimulus spending.) ...

(Emphasis added.)

So, did you follow that? Basically what Riedl is saying is that tax cuts disn't cause the deficits because only a limited amount of deficits can be traced to the tax cuts in isolation. A much bigger percentage can be traced to the "other new spending" (most of it from budgets passed by GOP Congresses), including spending on two wars and the Bush prescription plan, followed by the economic downturn.

But, Bruce, if Bush cut taxes and subsequently there were big budget deficits because there were wars to pay for, a prescription drug plan to fund, and an economic downturn that meant people had less income to tax, doesn't that mean that Bush's tax cuts failed to anticipate the future? And that it might have make sense to adjust how much tax revenue was collected, i.e., by reversing the tax cuts? And wasn't failing to acknowledge the problem at all George W. Bush's fault?

Bruce, should we be sticklers about it and say the deficits weren't caused by passing the tax cuts, but rather by keeping them after circumstances changed?

But no. Reidl won't tolerate that argument. As I say in the header of this post, if tax cuts are like drunkenness, Reidl is arguing that the problem wasn't that Bush drove drunk, it was that other cars got on the road with Bush and presented themselves as targets he could drunkenly hit. If they'd had the decency not to do that, Bush's drunk driving wouldn't have done anyone any harm.

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