Bercovici asks what I make of Dick Cheney’s (unprecedented?) op-ed
in the WSJ today. The answer, I think, is pretty easy when you come across
its standard recitation of supply-side principles:
Even at a lower rate of taxation, the hard work and productivity of Americans
is generating more tax dollars than ever before.
Mark Thoma actually rebutted this last night before the op-ed even appeared,
with an excellent and punchy blog entry entitled "Uh,
No, Your Tax Cuts Didn’t Pay for Themselves". "The tax cuts made
the deficit worse," he writes. "End of story." Which makes it
rather hard to take seriously Cheney’s assertion that "no other president
has spent more time or political capital trying to avert a fiscal disaster that
everyone knows is coming".
The fact is that fiscal disasters can’t be averted on the spending side of
the ledger alone: if you’re serious about fiscal policy, you often have to raise
more revenue as well. This is known as a tax hike, and as Bush 41 learned to
his cost, it can be politically suicidal for a Republican. But that doesn’t
make it bad fiscal policy.
Frankly, I don’t trust any of Cheney’s statistics, either: he illustrates "nearly
six years of uninterrupted economic growth", for instance, by citing the
number of new jobs created since August 2003, and his examples of rising tax
revenue since 2005 conveniently ignore the decimation of tax revenues which
was caused by the Bush tax cuts.
But I think the best person to answer Jeff’s question is not me, but rather
Alan Greenspan, the man to whom Cheney is responding. And it just so happens
have Greenspan’s answer right here.
Your book criticizes the Republican Congress and the Administration for
abandoning small government principles. Is Dick Cheney part of the problem
or part of the solution?
I don’t really know. I mean you have to understand how profoundly
impressed I was with Dick Cheney during the Ford Administration. And he and
I remain very close in the years subsequent. Indeed, he was the only person
who showed up at both my 50th and 70th birthday parties. And I still hold
him in high regard. There’s an extraordinary intelligence there. He
has very good judgment on issues… I do know that other than the issue
that we had on the deficit [whose importance Cheney downplayed] that he had
very much the same ideas as I had. I have no reason to believe his views from
the Ford administration have changed.
Make of that what you will.