Editore"s Note
Tilting at Windmills

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April 15, 2011

'TOO MUCH REVENUE'.... About 10 years ago, President Clinton handed off a large budget surplus to President Bush, who immediately set out to make it disappear. As the Republican president saw it, if the government was taking in more than it was spending, it necessarily meant Washington was "charging" the American people too much.

The government, the argument went, had "too much revenue." The proof was right there in the surplus -- roughly $200 billion more was coming in than going out.

A decade later, the Republican approach has changed. If Bush's logic (I use the word loosely) were right, and surpluses, by definition, meant Americans were charged too much, then it stood to reason that deficits, by definition, meant Americans are being charged too little.

Except, that's not how this game works. We have a $1.5 trillion deficit and a $14 trillion debt, most of which is the result of Republican fiscal irresponsibility. But the standard GOP line now is that it's important to address this problem without taking in so much as an extra penny.

House Majority Leader Eric Cantor (R-Va.) got this started late last year, arguing, "I really want to see that we can come together and agree upon the notion that Washington doesn't need more revenues right now." As foolish as this argument sounds, it's become a standard GOP talking point. Sen. John Barrasso (R-Wyo.) declared this week, "We don't need more revenue!" Rep. Todd Rokita (R-Texas) insisted yesterday that the federal government has "too much revenue as it is."

I'd like to think this is absurd on its face. The analogy is admittedly imprecise, but imagine a family was in debt and struggling with its finances, and the breadwinners declared, "We'll be better off if don't bring any additional money. Indeed, maybe we should ask our employers to cut our pay."

Alex Seitz-Wald explained this well.

As a share of GDP, government revenue in 2009 (the most recent year available) was at its "lowest since 1950." ... But even before the recession, there simply wasn't enough money coming into the federal government to cover costs, forcing the government to borrow 40 cents of every dollar it spends, as Republicans like to remind Americans so frequently. [...]

There wasn't "too much revenue" in 2001, and there's far less today.

To reduce a budget shortfall, the government needs more money coming in, less money going out, or some combination of the two. The Republican solution in 2011 is to ensure the government has less money coming in, which isn't one of the sane options.

Steve Benen 10:00 AM Permalink | Trackbacks | Comments (16)

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The "too much revenue" argument would have made sense in 2001, had we not still had a large debt (primarily from Reagan). Keep the extra revenue for a few years, and then cut taxes once the debt was paid off- I would have been fine with that. That way, when bad economic times inevitably came, we'd be able to borrow money freely with much less concern about deepening an existing debt hole. Unfortunately, Bush and the Republican congress (then and now) got it exactly backwards- cut taxes in good economic times, ostensibly to stimulate the already strong economy, and then cut spending and reduce deficits when we desperately need stimulus because "we're broke."

Posted by: Jurgan on April 15, 2011 at 10:08 AM | PERMALINK

I wonder when some republican will take the next obvious step and notice that government revenues go up when the economy improves. So obviously we should freeze intake not as a percentage of GDP but in absolute terms. Any dollar amount greater than government revenue in 2009 should be returned to the top 1% of earners as a bonus.

Posted by: paul on April 15, 2011 at 10:16 AM | PERMALINK

Why aren't Democrats talking about 1937?

When Franklin Roosevelt was inaugurated in 1933, unemployment in the United States was 25 percent (37 percent for non-farm workers). By 1936 unemployment was down to 14.3 percent. Then economic conservatives convinced Roosevelt to start worrying about the deficit and the Federal Reserve raised interest rates in response to fears about inflation. By 1938 unemployment had shot back up to 19 percent.

Sound familiar?

American voters aren't very bright, but even they should be able to see the direct historical parallel and where Republican policies are leading us -- if the Democrats have the guts to tell them.

Posted by: SteveT on April 15, 2011 at 10:19 AM | PERMALINK

Todd Rokita is a rethug from Indiana. He is a rethug in the truest sense of the word.

Todd made his bones as part of the Brooks Brother riot during the 2000 Florida recount. He parlayed that into a stint as Secretary of State for Indiana and then was elected to Congress from the Indiana 4th to replace another repuke who got caught with his pants down and his hand in the cookie jar.

Posted by: SadOldVet on April 15, 2011 at 10:20 AM | PERMALINK

Logic is irrelevant in politics.

-and LYING get you a much bigger bang for the buck!

Posted by: DAY on April 15, 2011 at 10:26 AM | PERMALINK

Why don't Republicans want us to have safe food, clean water, reliable bridges, vaccines, etc.??

Yeah, that's a rhetorical question.

Posted by: Mac on April 15, 2011 at 10:27 AM | PERMALINK

Once you realize that reasoning with religious zealots is a useless exercise, your mood brightens and your sanity returns.

Posted by: walt on April 15, 2011 at 10:38 AM | PERMALINK

Too many notes!

I guess these guys aren't into Adolf Wagner, let alone Adam Smith: http://www.dohiyimir.org/2011/04/taxes-are-the-price-we-pay-for-civilization.html

Posted by: Todd for VT House on April 15, 2011 at 10:39 AM | PERMALINK

It IS a sane option if the Media says it is.

Posted by: T2 on April 15, 2011 at 10:43 AM | PERMALINK

I would only urge anyone looking for a sane, lucid exposition of what's happening in the economy today - and by the way, one which even the most unbalanced Tea Partier can understand - ought to look at this piece by Roger Ebert:

http://blogs.suntimes.com/ebert/2011/04/the_one-percenters.html

Posted by: CRhetts on April 15, 2011 at 10:48 AM | PERMALINK

Anyone who cannot see through the GOP's hypocrisy regarding the deficit needs a brain scan.

Posted by: max on April 15, 2011 at 11:14 AM | PERMALINK

Yeah, it would be nice if the GOP embraced elemental logic. But it would cost them their base.

Posted by: Jon on April 15, 2011 at 11:53 AM | PERMALINK

I do agree with Republicans on one thing - we need to cut before raising taxes.

Neither party has demonstrated all that much interest in spending less - though I give Democrats a much higher grade than the feckless GOP, who talks a great game, cons conservatives into voting for them, and then goes out and spends MORE money.

Especially when I've read that there's something along the lines of $600B in government duplication - low-hanging fruit there should be instant agreement from both parties in cutting. (I believe it was on HuffPo.)

And before we think about raising taxes on any individuals, we need to close the loopholes for corporations.

Posted by: JEA on April 15, 2011 at 12:30 PM | PERMALINK

I do agree with Republicans on one thing - we need to cut before raising taxes.

We really, really, don't. Other than eliminating the Bush tax cuts, the thing that would go the furthest toward eliminating the deficit would be getting the economy and employment back to normal. Jobs aren't being created because of lack of demand, and people aren't creating demand by spending because they're unemployed or worried that they might be. At this stage, government spending is still the most effective way to break that cycle, so cutting spending will actually make the deficit worse, not better, by delaying recover.

I agree that increases should be on corporations (and structured so the ones making record profits pay the lion's share) and those with high incomes, but the tragedy of the current state of politics is that the right answer isn't even allowed into the discussion.

Posted by: Redshift on April 15, 2011 at 1:07 PM | PERMALINK

The GOP would rather lie to the country than give up their bumpersticker. 'We don't have a REVENUE problem in Washington, we have a SPENDING problem'. Bull.

Posted by: SYSPROG on April 15, 2011 at 1:20 PM | PERMALINK

Rokita -- whether he's from Texas or Indiana -- is a Polish name. And, in Polish, it's one of the euphemisms we use to speak of the devil, without actually saying "devil". Obviously, undesirable traits had been evident in that family for at least 400-500 yrs (about the time everyone in Poland, not just the aristocrats, acquired surnames).

Posted by: exlibra on April 15, 2011 at 3:57 PM | PERMALINK
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