- Cafe Hayek - https://cafehayek.com -

Fatten the Beast

Tweet [1]

Here’s a letter to the New York Times:

Paul Krugman asserts that “taxes have lagged behind spending partly thanks to a deliberate political strategy, that of ‘starve the beast’: conservatives have deliberately deprived the government of revenue in an attempt to force the spending cuts they now insist are necessary” (“We’re Not Greece [2],” May 14).  Prof. Krugman’s interpretation of the facts is worse than bizarre.

During the alleged ascendancy of laissez-faireism – roughly, the last 30 years – Uncle Sam’s inflation-adjusted tax revenues have skyrocketed.  Compared to 1980, inflation-adjusted tax revenues for 2010 are projected to be higher by 61 percent.  And in 2007 (the last year before the current recession), Uncle Sam’s real revenues were more than 100 percent higher than they were in the year that voters first put Ronald Reagan into the Oval Office.*  During this same time, U.S. population increased by only 35 percent.

This beast is no more deprived of revenue than Prof. Krugman is deprived of the gall necessary to misrepresent facts with a straight face.

Sincerely,
Donald J. Boudreaux

* Figures calculated from data found in Table 1.3 here [3].

If your real income rises by 61 percent, but your real expenditures rise by 142 percent, do you blame your resulting financial woes of your being “deprived” of income?

Here’s John Stossel’s dissection of Krugman’s column [4].

Comments