Not the party of Reagan

Theres and handsome devil!I’ve been amazed at the effect the Harriet Miers nomination has had on Republicans. It’s not that her being confirmed or rejected is that big of deal but instead it seems like the last straw for conservatives who have put up with unprecedented increases in entitlement spending and gutless leadership. While Bush has pursued the war on terror with a determination not seen since Truman virtually everything else he’s done has left conservatives wanting. Real conservatives don’t want their cake and eat it too. The Bush tax cuts made us happy but he followed them up with a god awful prescription drug benefit entitlement. The reconstruction, military response in Afghanistan, and economic stimulus after 9-11 was followed by more tax cuts and “No Child Left Behind”. After the “It’ll cost what It costs” comment from Bush after Katrina I think conservatives went into insulin shock and this horrible SCOTUS pick snapped them out of it.
I grew up being serenaded by benefactors of the Johnson welfare state blaming Reagan for consigning them to starvation and ridiculous TV movies about being homeless and getting no help from the Government. Nothing says spending cuts like a ketchup sandwich. It was glorious. When Bush was elected I dreamed of long nights watching cable news laughing at the strained arguments Democrats would make for why the cut of a certain block grant or entitlement DOOMED!! their favorite victim group. Well we’re now in the 5th year and I haven’t once seen Bush called “heartless” 1/100th as much as Ronnie or even Newt Gingrich. Welfare reform under
Clinton was the closest thing I’ve had and that’s pathetic.
The sad thing is that we can’t even wish we voted for the other guy (or party) because they’re even more pathetic. They’re just like that cloying guy that’ll say anything to get in a girls pants (See Stiffler in American Pie/American Wedding). For as good as Andrew Sullivan feels telling conservatives “I told you so” about Bush, at some level he must be relieved that Kerry wasn’t elected. He would have been an utter disaster.

Don’t agree?

Now I’m just looking forward to 2008. Hopefully we get a do over with McCain (or Condi).

UPDATE: Ugh. This is just nausiating.


Ben said...

Great post Andrew. I'll try to put more up here later, but I've been quite impressed with the discussion that has been emerging from the libertarian faction of the Republican party. In my opinion some of the best discussion has come from the usual suspects; Instapundit, Andrew Sullivan, Belgravia Dispatch and the like, but even National Review seems to be getting into it. It seems that the Miers nomination has really been the straw that broke the camel's back.

Joe said...

I would be one of those adorers of the welfare state (I don't think it's wining to want elderly people to be able to afford medicine.) But the left and the right can agree on one thing; defecits DO matter. It's not that it's bad to run on the margins. If the resulting growth from government expenditures can outpace the defecit level, it's sustainable to run defecits. But we have deep, structural defecits that are already undermining confidence in the dollar, defecits that we're financing through loans, not expanded growth. I'd like to see us start a few fewer wars and raise taxes on rich people to pay for it rather than cutting taxes and cutting entitlement programs. Americans pay about 30% of their income in taxes (20% federal, 10% state and local). How much lower can we get and still expect effective governance?
The standard economic package for growth is to cut taxes and increase expenditures, which is good policy during a downturn. But those are "stimulus" policies, designed to be a kick in the ass, not permanent measures. At some point (and granted, we're still a good distance from this point) the debt becomes unmanageable.

Andrew said...

The “raising taxes on rich” people solution intuitively seems like a good and fair solution, but in practice has never been effective at increasing tax revenue. The only thing the over taxation of the wealthy has ever achieved is an exodus of wealth and fewer wealthy people. Look at pre-Thatcher England for a perfect example. Despite having an incredibly progressive tax structure, the tax burden actually shifted more greatly on the middle class and poor. Inversely, while the incorrect perspective that Bush’s tax cuts disproportionately benefited the rich has calcified within the MSM, in reality, the wealthy have a greater share of the tax burden than they ever did under Clinton.


And counter intuitively, the tax cuts have not been economically irresponsible. Tax revenue has actually sharply increased with lower tax rates.


While Keynesian economists – unfortunately the kind most found in academia outside of U. Chicago – disparage the Laffer curve (http://en.wikipedia.org/wiki/Laffer_curve), they are oddly silent when its effects are so irrefutable. Further evidence can be found in the resurgence of post-Soviet block states who have instituted flat tax rates of less than 30% (down from 70% in some cases) and have seen explosive growth.

The US government unfortunately resembles too many of its citizens and the suggestion that it could not withstand substantial spending cuts across the board without cutting into muscle is akin to concern that Teddy Kennedy is on the verge of malnutrition. In the wake of Hurricane Katrina, the Heritage foundation quickly identified $250 billion in waste in the form of unneeded subsidies, ineffective programs and pork. If that $250 billion is no longer collected in taxes, no longer channeled through a 100 layers inefficient bureaucracy, and no longer spent on goods and services with very little utility, that $250 billion will be channeled into vastly more productive investments in the free market. As those investments actually produce things people need and want that $250 billion grows in value and creates jobs and so on – raising tax revenue.

Government is the worst possible solution for solving the needs of society and should be turned to only as an option of last resort. It’s incredibly inefficient and everything it touches destroys wealth.

So to finally answer your question “How much can taxation shrink before necessary functions of government wither?” No one knows that, however I do know that in just 30 years the US standard of living has increased almost 300% thanks to the free market. If Government had actually been as small as it could have been, imagine how much wealthier we would be now.

Andrew said...

Here's a relevant article linking a non-preditory tax structure to the rich (flat tax) and overall economic growth.

Flat Tax Rates and GDP Growth Rates

Flat Tax Rate
GDP Growth Rate




Hong Kong









Andrew said...

Heres a flat tax plan that could possibly satisfy both the left and right.