A rational explanation of the GOP budget?
March 7, 2011 2:42 PM   Subscribe

Can anyone point me toward some writing by a smart person in support of the GOP's budget? I'm not being snarky—I am sure that wealthy, anti-intellectual people looking out for their own interests is a motivation on the part of some congresspeople, but I am not ready to believe in a world where it is the only one.

I think the news media has been doing a terrible job of laying out the basic arguments in a way that would help to bridge the communication gap between ideologies.

I understand the reasons for cutting spending—I am primarily interested in a sensible explanation for why tax cuts for the wealthy will be more beneficial to Americans than the numerous public services that have been slashed in the latest GOP budget plans.

*By "smart person," I mean someone who makes a rational argument and backs up his or her assertions with evidence. A lot to ask, I know.
posted by zadermatermorts to Law & Government (11 answers total) 10 users marked this as a favorite
 
Typically these people believe in supply side economics.
posted by damn dirty ape at 2:43 PM on March 7, 2011




A core idea of supply-side economics is the Laffer curve. The general thrust is that the tax rate can be thought of as a function that can be optimized. As such, if your tax rates are too high, then reducing taxes can spur the economy and result in greater overall tax revenues.

I don't know enough about economics to say whether there is any empirical evidence supporting the Laffer curve.
posted by jasonhong at 3:02 PM on March 7, 2011


If you search Megan McCardle's blog I seem to remember her doing several posts on the Laffer Curve. IIRC, the empirical evidence is weak at best, and what evidence there is points to rates much higher than where we are today.

In general, Megan is a classic libertarian (conservative on econ, liberal on social issues) and I've always found hee analysis of either side's economic policies to be rational, whether I agree with her or not.
posted by COD at 3:07 PM on March 7, 2011


Check out this intelligence squared debate between Arthur Laffer (of the Laffer curve) and Phil Gramm (who was Mccains economist i.e. 'its all a mental recession' fame and the original sponsor of the gramm-latta bill) versus Nouriel Roubini and Laura Tyson (from Obama's economic team.)

It's a good summary of the arguments back and forth.
posted by jourman2 at 3:08 PM on March 7, 2011


I'm typically a fan of Mankiw and Frum for the reasonable conservative opinion.

I think the larger question in terms of ideology is not supply side economics. That's a basic neo-Keynesian belief that conservatives don't particularly hold onto strongly. It's like saying that liberals like Planned Parenthood funding because more government spending has been proven to grow the economy. The theory sounds nice enough, the empirical data is very weak. And it doesn't matter if it's true or not, because we like Planned Parenthood.

Under a 'small government' ideology, if Americans really wanted Planned Parenthood and NPR, they would pay for it voluntarily. By guaranteeing funding for these liberal causes through taxation, you're blocking philanthropic dollars that could go to something that Americans value more.

(while I am more liberal than conservative, the inability for both sides to regard each other as rational adults is a serious pet peeve of mine)
posted by politikitty at 4:02 PM on March 7, 2011 [2 favorites]


2nd Frum. I agree with his identification of problems (e.g. we need to address x, y, z). I don't agree with his remedies but I figure agreeing that we can start in the same place is pretty good these days.
posted by SirOmega at 4:40 PM on March 7, 2011


You can be pro-small government without being a supply-sider, i.e., shrink government by aggressively lowering the tax burden on middle income people. If the GOP would seize onto this idea they would be tough to beat come election time.
posted by blargerz at 6:00 PM on March 7, 2011


If you search Megan McCardle's blog I seem to remember her doing several posts on the Laffer Curve. IIRC, the empirical evidence is weak at best, and what evidence there is points to rates much higher than where we are today.

The Laffer Curve is just a restatement of the principle of diminishing marginal returns of taxation. As a general matter, if the government taxes individuals at 100% or 0%, then it will receive no tax revenues. When you describe it as supported by only "weak" empirical evidence, I think you are probably not appreciating the whole concept.

If you want smart, web-ready reading, then look at the web sites of the Heritage Foundation, the Cato Institute, and the National Center for Policy Analysis. So long as you are not going to dismiss anyone who holds conservative, limited-government principles as ipso facto unreasonable or unintelligent, you'll find good summary arguments there.
posted by Slap Factory at 6:34 PM on March 7, 2011


I understand the concept of the Laffer Curve just fine. If you drop the marginal tax rate from 70% to 60% there is some possibility that it's a net benefit to incoming cash flow to the tax agency. From 39% to 37%? Not so much. It's conceivable and even likely that Reagan slashing the top rate of 90% freed up capital for investment that led to more jobs and a net revenue increase. Given everything else going on in an economy the results are very hard to pin on a causal effect.

But the Republicans trying to make the same argument about the extension of the Bush tax cuts are full of shit.
posted by COD at 7:23 PM on March 7, 2011


Apologize if I seem to be piggy-backing on this, but are there readable, well-thought and logical debates on both sides of the equation?

Most of the articles or reports seem to be one-sided with no counter arguments on the same points [I think I am not expressing this clearly enough. As an example, say I argue using points A, B and C and you respond not with logical arguments against them, but D, E and F].
posted by theobserver at 9:42 PM on March 7, 2011


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