Scott Tibbs

Yes, the issue is spending

By Scott Tibbs, November 9, 2021

A response to my letter to the editor argues that I was missing "nuance" about "why" revenue and spending increased over time. I get 200 words in a letter to the editor, not nearly enough space to get into every detail of budgetary policy. I did not say that federal revenue grew only because of tax cuts. The letter invents an argument I did not make, and that claim should have been edited out.

But the "why" spending and revenue went up simply does not matter: Despite the fact that revenue was growing in the 1980's and 2000's, spending increased at a much higher pace than revenue did. Revenue was significantly higher when President Ronald Reagan and President George W. Bush left office than when they entered office, yet both were running large deficits. The main point of my letter - that the deficits were caused by too much spending instead of too little revenue - remains true.

Under Ronald Reagan: Under George W. Bush: The author brings up the Clinton-era surpluses. But note that when we started running a surplus was after the Republicans took control of Congress in 1995 and moved to put some discipline on our spending - not even by cutting spending, but reducing the rate of growth. Would we have had budget surpluses without the Republican Congress? The CATO Institute says no:
In fact, in 1995, two years after that tax hike, the budget baseline submitted by the president’s own Office of Management and Budget and the nonpartisan Congressional Budget Office predicted $200 billion deficits for as far as the eye could see.
The author admits that significant increases in federal spending caused the Bush deficits with the amount of money we spent on the war in Iraq. It is said that during wartime, we need to choose between guns and butter. However, Bush refused to make that choice. He decided we could have both, which gave us huge budget deficits. I am not sure what author was responding to with his statement that President and Bush and a Republican Congress "killed the surplus," considering I explicitly called out Republicans generally and Donald Trump by name for lack of fiscal discipline.

The only way we are going to get the federal budget deficit under control is to get spending under control. Raising taxes on "billionaires" will not solve the problem. We do not need deep spending cuts or harsh austerity measures to get back to a balanced budget, but we do need to abandon aggressive multi-trillion dollar spending schemes. We simply need to hold the line.

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