Paul Krugman Is Forgetting One of the Bush Administration's Big Lies
Krugman has a good column today looking at the insanity inherent in the GOP's new and extreme adherence to ideological purity-tests. In the middle of it, however, the following passage jumped out at me:
Supply-side voodoo — which claims that tax cuts pay for themselves and/or that any rise in taxes would lead to economic collapse — has been a powerful force within the G.O.P. ever since Ronald Reagan embraced the concept of the Laffer curve. But the voodoo used to be contained. Reagan himself enacted significant tax increases, offsetting to a considerable extent his initial cuts.
And even the administration of former President George W. Bush refrained from making extravagant claims about tax-cut magic, at least in part for fear that making such claims would raise questions about the administration’s seriousness.
Recently, however, all restraint has vanished — indeed, it has been driven out of the party. Last year Mitch McConnell, the Senate minority leader, asserted that the Bush tax cuts actually increased revenue — a claim completely at odds with the evidence — and also declared that this was “the view of virtually every Republican on that subject.”
McConnell's right: this completely counterfactual view -- the economic equivalent of young earth creationism -- is shared by virtually all Republican politicians (but no conservative economists). But it seems that Paul Krugman is forgetting that it was also the view of the Bush administration.
In 2007, Time magazine’s Justin Fox sampled some Republican opinions on this interesting belief system: “If there’s one thing that Republican politicians agree on," he wrote, "it’s that slashing taxes brings the government more money.”
“You cut taxes, and the tax revenues increase,” President Bush said in a speech last year. Keeping taxes low, Vice President Dick Cheney explained in a recent interview, “does produce more revenue for the Federal Government.”
The following year, Bush claimed yet again that it’s “a fact that our tax cuts have fueled robust economic growth and record revenues.” The claim was such an egregious falsehood that it prompted Andrew Samwick, former chief economist on Bush’s Council of Economic Advisers and then a professor at Dartmouth, to plead with the Bush administration to stop making it. In an opinion column in the Wall Street Journal, he wrote, “You are smart people. . . . You know that the tax cuts have not fueled record revenues. You know what it takes to establish causality. You know that the first order effect of cutting taxes is to lower tax revenues.”