Read Between the Lines

With the budget on the table the front page argument is about which party is cutting spending more and whose ox is going to be gored. There are only two sides to a ledger sheet. You list revenue on one side and expenditures on the other. In the political arena the poison side is the revenue page. You don't tell people you are going to raise their taxes.

The GOP has taken the position that looks to the result of JFK, Reagan and George W. Bush's tax cuts. The prediction of Arthur Laffer that in the current prevailing situation in the US a reduction in tax rates will actually result in an increase in tax revenue has been confirmed. When people keep their own money, they spend, invest, grow their business and hire new workers. The unfortunate corollary is that each time that has been done, the panderers have bellied up to that trough and over-eaten. They then feel smug in pointing out that in each of those tax cut instances the deficit has grown and the debt climbed.

The Democrats lean toward the fairness argument. Since many more people are low income earners the votes lie on that side of the political spectrum. You can raise taxes and still be re-elected if you sell the idea of wealthy and successful people being able to do much more just to be fair and feel good about themselves. Raising federal taxes on the wealthy and business owners while handing out additional largesse to the 47% of Americans who already pay zero federal income tax is a vote winner. Some of the wealthy even publicly embrace the concept, although usually they are well sheltered and diversified.

So, the debate will rage about who is cutting what and how that will impact the economic future of the nation. But take a look at this analytical perspective:

Finding the Money For More Spending

Gotta love the creativity in that. Stand before the nation and tout your savings of a trillion dollars over a decade while at the same time raising taxes by $1.5 trillion.