Month: February 2008

February 8, 2008 02:05 PM | Permalink |

President Bush’s proposed budget plan for fiscal years 2009 through 2013 envisions huge cuts in education, health, environmental and other programs. Most observers believe that such budget cuts are too draconian to ever be implemented. After all, Congress has rejected many of them before. However, they should be taken very seriously in one important sense: They are exactly the sort of public service reductions that would be necessary if the Bush tax cuts are extended.

The Bush administration concedes that the budget deficit will top $400 billion for fiscal year 2009, but claims the deficit will be reduced thereafter. The President continues to assert, as he did last year, that following his plans will lead to a balanced budget in fiscal year 2012. It is therefore informative to examine how public services would be different in 2012 if Congress followed his advice.

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February 4, 2008 02:58 PM | Permalink |

The Wall Street Journal’s editorial board is at it again. Their latest riposte in their ongoing duel with mainstream economics is an attempt to cast a normal upswing in a particular type of revenue, which always occurs in an economic cycle, as proof that cutting taxes actually increases revenues. The Journal ignores the fact that this revenue is well below the peak it reached during the Clinton era — when taxes were higher.

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