PART 2—NOT THAT MANY NEW TAXES (permalink): The editors are still amazed—still amazed after all these years. On Sunday, they authored these puzzling thoughts about the debt limit deal:
NEW YORK TIMES EDITORIAL (8/6/11): The Truth About Taxes
A week later and we are still amazed at how the Republicans in Congress pulled it off. They held the economy hostage, won some cheap political points, and all of us will spend the next decade paying the ransom as government programs—$900 billion over 10 years in the first round—are slashed and the recovery is put at risk.
The only glimmer of hope is that the battle is not completely over—if President Obama is finally willing to fight.
Under the terms of the ill-conceived debt agreement, Congress has to propose another $1.5 trillion in deficit reduction measures by December. Just to ensure that rationality does not have a chance, Republican leaders said they would not put anyone on the deficit-cutting “super-committee” who might entertain the idea of raising taxes.
A week later and we are even more amazed by the failure of Mr. Obama and the Democratic leadership to stand up to this intransigence. If they do not start pushing back, with the same ferocity, the results will be disastrous.
We know—it’s just a figure of speech. But given the arc of American politics, why would the editors be “amazed” when spending cuts win, and tax hikes lose, in a pivotal budget fight? Why would anyone be surprised by that sort of outcome?
For decades, one side has fought an aggressive messaging war about the need for no new taxes—ever, in any circumstance. In “response,” the other side has endlessly fiddled and diddled. What messaging stands in opposition to that famous old battle cry, “No new taxes?” Have you ever heard the messages which were designed to counter this cry?
In fairness, the editors seem to know about the power of that hoary old anti-tax message—the messaging which has driven our politics over the past thirty years. Sure enough! In their next paragraph, they alluded to same—and they pandered a bit to us rubes:
NEW YORK TIMES EDITORIAL (continuing directly): Standard & Poor’s made its judgment about both the political standoff and the all-cuts, no-new-revenues deal on Friday when it lowered the country’s long-term debt rating one notch, down from AAA. And while “no new taxes” pledges are almost always big political winners, Americans are also figuring out that the country cannot keep on this way. According to the latest New York Times/CBS News Poll, 63 percent support raising taxes on households that earn more than $250,000 a year to help address the deficit.
“No new taxes” pledges are almost always big political winners! Why then were the eds amazed when this messaging won out again?
Before they were done with this editorial, the editors would recommend a large tax increase—before they panicked and took it all back. But why is it so hard to talk about tax hikes in this country?
Why is it hard to talk about taxes? Just look at the paragraph in which the eds applaud us, the American people, for starting to figure it out.
“No new taxes” is almost always a winner, the editors say. But after that, they praise us rubes, saying this:
“Americans are also figuring out that the country cannot keep on this way. According to the latest New York Times/CBS News Poll, 63 percent support raising taxes on households that earn more than $250,000 a year to help address the deficit.”
They praise us for supporting tax hikes—on upper-end earners only! But do you remember what Brother Krugman told Charlie a few weeks ago?
KRUGMAN (7/22/11): What the long-run solution to the U.S. budget problem is, is controlling health-care costs. It means more of the kinds of things that were already in the Affordable Care Act. A lot of serious, serious efforts to bring the rate of growth of health-care costs down, bending the curve—horrible metaphor, but bending the curve, which we know can be done because other countries do it. And then we need revenue. In the end, we’re going to need three, four percent of GDP in additional revenue. You can get some of that by allowing the Bush tax cuts to expire, but we’re going to need more than that.
So in fact I have a prediction. If David [Brooks] and I are still around here 25 years from now, I predict that we will have a much more controlled health-care system that sort of matches the cost performance of other countries, and we’ll have something like a value-added tax to increase revenue. And that is how America will be solvent in the end.
Say what? Given the poverty of our “discourse,” it’s no longer clear what someone means when he discusses “the Bush tax cuts.” Given the power of liberal avoidance, the phrase is often used, at this point, to refer to the upper-end tax cuts only. That said, Krugman seemed to be saying that we will need a lot more revenue in the future. Of course, that’s what Bruce Bartlett said on Hardball just a few days later:
BARTLETT (7/27/11): The Republicans keep saying that tax cuts are the key to prosperity. Well, the 2000s is evidence that that’s not true. And also we raised taxes in 1982. They said it would be a recession. We raised taxes again in 1993. They said it would be a recession. We had booming economies in the 1980s and 1990s. I think if we went back to the taxes we had the 80s and 90s, we’d be a lot better off.
[...]
I don’t think there is any question that we would have positive economic effects if we went back to the Clinton-era tax rates.
Rather clearly, Bartlett was talking about all the Clinton-era tax rates, not just those on high earners.
Do we need to return to the Clinton-era tax rates? Here at THE HOWLER, we don’t really know; like everyone else in this brain-drained land, we’ve rarely seen the question discussed. We live within a political culture which is built around the avoidance of serious tax debate. No one is willing to conduct frank discussions—least of all the New York Times editors, who found themselves “amazed” last week when spending cuts won out again.
Those editors! They praised us rubes for the way we’re willing to restore the Clinton tax rates on high earners only. But would that restoration be enough? Krugman and Bartlett don’t seem to think so—and the editors seem to get weak in the knees whenever they think about anything else.
Tomorrow, we’ll look at the way the editors bailed when they made their own tax increase proposal. “Not that many new taxes!” So the editors seemed to cry.
Why be amazed when spending cuts win if that is the other side’s message?
Tomorrow: An instant retraction
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