In this election cycle, Republicans have made curbing federal spending a big part of their campaign. They’ve also pledged to cut taxes. And the two promises certainly sound good to voters.
So, if the GOP wins the House, as expected, what will happen to the deficit? Here’s my prediction: Two years from now, the deficit will be no smaller. It may even be larger. Why? Because Republicans won’t do much to rein in spending. And if they cut taxes, there won’t be enough revenue to fund the budget.
It’s simple elementary school math.
It might help to take a look at how the federal budget got to be such a mess. Justin Fox of the Harvard Business Review Group says:
In other words, the giant deficit is mainly the result of the collapse in tax receipts brought on by the recession, not the increase in spending. Nice to know, huh?
You can read more about Fox’s model here.
Republicans, aided by the rightwing communications machine, have persuaded voters of a couple of things that happen to be wrong. One is that President Obama has substantially increased spending on wasteful government programs. In fact, one-third of the stimulus was in the form of tax cuts. And the bank bail-out, which started under George W. Bush, has mostly been paid back — earning taxpayers a profit. The health insurance law will reduce the deficit over ten years, not add to it, according to the non-partisan Congressional Budget Office.
But continuing to depress revenues with a huge tax cut for rich Americans will certainly make the deficit larger. That’s a fact.