David Stockman: We Need To Raise Taxes. Like Reagan Did.
Ronald Reagan’s former budget director is unlikely to make any friends among the Grover Norquest crowd after his appearance on This Week today:
FREELAND: You worked for Ronald Reagan. Do you think the American economy — so you’re, like, a red-blooded capitalist — could it sustain higher taxes than it has now?
STOCKMAN: Absolutely. In 1982, we were looking at the jaws of the worst recession since the 1930s. We overdid it in 1981, cut taxes too much. We came back with a big deficit reduction plan in 1982. Unemployment’s at 10 percent, the economy is in dire shape, and we raise taxes by 1.2 percent of GDP, which would be $150 billion a year right now — not 10 years down the road — but right now
It’s not surprising that Stockman would defend a plan that he was largely the architect of, but his point is worth considering nonetheless. As I noted last week, not everyone in the GOP buys into the Grover Norquist “No Tax Increases” orthodoxy, and if there’s going to be any semblance of a budget deal then higher taxes (not necessarily higher tax rates, though) will have to be on the table.