Nationally, Republicans are trying to portray themselves as deficit hawks concerned about the deficit spending of President Obama and elected Democrats, who are trying to pull the country out of a deep recession. At the same time, those same “deficit hawk” Republicans are calling for an extension of the George W. Bush-era tax cuts that both heavily favored the richest two percent of Americans and which drove up our national deficit, and which would continue to drive up our national deficit if extended. Not surprisingly, Republicans are trying their best to deny the fact that extending the Bush tax cuts would increase the national deficit, lest they be labeled hypocrites (which they are) for supporting driving up the nation’s spending deficit while at the same time attacking Democrats for doing the exact same thing.
For instance, watch as Rep. Eric Cantor (R-VA) squirms as he tries to avoid answering a direct question about whether extending the Bush tax cuts would increase the national deficit:
At about 1:02 into the clip, Rep. Cantor goes on to explain that if the priority is to grow the economy, “then you don’t make it more expensive for job creators; you don’t want to hike their taxes so they won’t hire people.” What Rep. Cantor really meant is that Republicans don’t want to raise taxes on the wealthiest two percent of Americans, even if it means exacerbating the nation’s budget deficit by billions and billions of dollars.
Here in Wisconsin, Republican U.S. Senate candidate Ron Johnson supports extending the Bush tax cuts, telling WisPolitics.com the government should make spending cuts to cover that drop in revenue:
“The last thing we need to do in a weakened economy is raise taxes on anybody,” Johnson said.
While I’d agree that the last thing we need to do in a weakened economy is raise taxes on the middle class, I’d argue that folks in the top two percent of income earners – which includes Ron Johnson – can afford to be taxed at a level that while higher than today’s level would still be lower than tax rates under President Ronald Reagan. What’s more, the Bush tax cuts certainly didn’t perform any economic miracles when it comes to growing the nation’s economy, so I’m not entirely sure how we’d be worse off than we are right now.
In an interesting twist, while national Republicans (and Ron Johnson) want to extend the Bush tax cuts, David Stockman, who served as the Director of the OMB under President Ronald Reagan, has voiced his opposition to the idea of extending the Bush-era tax cuts:
IF there were such a thing as Chapter 11 for politicians, the Republican push to extend the unaffordable Bush tax cuts would amount to a bankruptcy filing. The nation’s public debt — if honestly reckoned to include municipal bonds and the $7 trillion of new deficits baked into the cake through 2015 — will soon reach $18 trillion. That’s a Greece-scale 120 percent of gross domestic product, and fairly screams out for austerity and sacrifice. It is therefore unseemly for the Senate minority leader, Mitch McConnell, to insist that the nation’s wealthiest taxpayers be spared even a three-percentage-point rate increase.
It’s worth noting Stockman was a supply sider long before many of the current crop of Republicans who support the idea that tax cuts always boost the economy were in Congress, and if Stockman’s opposition wasn’t meaningful enough, former Fed Chairman Alan Greenspan said on “Meet the Press” this weekend that the push by congressional Republicans to extend the Bush tax cuts without offsetting the costs elsewhere could end up being “disastrous” for the economy:
“I’m very much in favor of tax cuts but not with borrowed money and the problem that we have gotten into in recent years is spending programs with borrowed money, tax cuts with borrowed money,” he said. “And at the end of the day that proves disastrous. My view is I don’t think we can play subtle policy here.”
I’d rather take the advice of Alan Greenspan over the opinion of Eric Cantor when it comes to issues relating to taxes and the economy, because something tells me Greenspan knows just a little more about both issues than Eric Cantor.