Debt and Taxes

Via McClatchy:  Debt limit stalemate forces new look at tax hike debate.

Dueling Democrats and Republicans have squared off in past similar talks over shrinking federal budget deficits. From President Ronald Reagan vs. Democratic House Speaker Tip O’Neil to President Bill Clinton against Republican House Speaker Newt Gingrich, the head-banging ritual is a time-honored tradition.

And it hasn’t always been pretty, as the government shutdowns of 1995-96 attest.

In the end, in the past, they always reached a compromise, with both sides accepting spending cuts and tax increases they didn’t like.

The most interesting part of the story is the chart below, which demonstrates a correlations between tax increases and deficit reduction.  And yes, caveats about simplistic cause and effect relationship apply.

There is, however, a general lesson worthy of consideration here:  we have had a deficit/debt problem for a while and we have dealt with it over time with a mix of spending and tax policies. To pretend like we are a point where this is no longer the case is pure fantasy, if the goal is really about fixing fiscal problems.

 

Both parties have raised taxes to reduce the deficit

 

 

Click the link at the top of the post to access a larger version of the graphic.

FILED UNDER: Deficit and Debt, Quick Takes, US Politics
Steven L. Taylor
About Steven L. Taylor
Steven L. Taylor is a Professor of Political Science and a College of Arts and Sciences Dean. His main areas of expertise include parties, elections, and the institutional design of democracies. His most recent book is the co-authored A Different Democracy: American Government in a 31-Country Perspective. He earned his Ph.D. from the University of Texas and his BA from the University of California, Irvine. He has been blogging since 2003 (originally at the now defunct Poliblog). Follow Steven on Twitter

Comments

  1. hey norm says:

    “… if the goal is really about fixing fiscal problems…”
    Eggzachary.

  2. legion says:

    To expand on Norm’s comment, Steven, you still appear to be treating the GOP as rational actors in this equation. They are not. They are legitimately willing to destroy this country’s economy _just_ because a Dem is President. This has _never_ been about “fixing fiscal problems”…

  3. @hey norm: @legion:

    Well, I put the qualifier that Norm quoted in on purpose….

    I concur that the goal appears to be something other than debt and deficit reduction. I am trying to point this out to those who don’t seem to see it.

  4. hey norm says:

    Don’t know if you saw the President’s news conference…I think he “sees it”.