Friday, November 12, 2010

The Return of "starve the beast" Nonsense


Back in 2001, President George W. Bush told reporters during a press conference that his first round of tax cuts weren't just designed as a "fiscal stimulus." They could also be thought of as a kind of "fiscal straitjacket for Congress."

And that's good for the taxpayers, and it's incredibly positive news if you're worried about a federal government that has been growing at a dramatic pace over the past eight years and it has been.

In other words, the tax cuts were an example of the classic "starve the beast" psychology -- most often associated with GOP strategist Grover Norquist. By depriving the federal government of revenue, the tax cuts would encourage Congress to be more thrifty.

As everyone knows, Bush's straitjacket restricted nothing. Bush's tax cuts busted the budget, turned Clinton's surplus into a deficit, and left the government unprepared to pay for war, recession or spiraling healthcare costs.

In fact, "starving the beast" has never worked -- if we're talking about the federal government. For the last 30 years, tax cuts have always been followed by increased government spending. The reason why, as explained by Cato Institute's William Niskinen, is simple. When you enjoy the benefit of services without paying their full cost, you end up consuming more services. If you, as an individual, are required to pay your credit card bill in full at the end of each month, you will consume only as much as you can pay for out of your real income. But if you can roll over the debt, and never pay the piper, you have no incentive to live within your means. The same principle works for government in general.
Andrew Lorenzo, Salon

1 comment:

Cudoine said...

"starve the beast" from norquist is the way islamists, whose stated goal is to bankrupt the US, policies advocated by norquist are designed to harm America. They converted the party once known for financial restraint into the big spenders. In terms of warfare it's brilliant.