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interesting article, something for everyone I think to dwell on. Reason certainly makes you think, it has challenged some of my previously held views which is always welcome, though I don't always like what I discover to be honest...
The whole article is, well worth reading, since I cm limited by copy right I will just post the first few questions and video......
The Triumph of Politics Over Economics
David Stockman on TARP, the Fed, Ronald Reagan, and Ron Paul
Nick Gillespie from the April 2011 issue
At the very start of Ronald Reagan’s presidency, David Stockman debunked the myth that Reagan and the modern Republican Party were dedicated to small government.
In 1981, the 35-year-old Stockman gave up his Michigan seat in Congress to become the new president’s budget director.
reason: You’ve emerged as a fierce proponent of letting all of the Bush-era tax rates expire and going back to the Clinton rates. Why do you want to revert to higher tax rates?
David Stockman: In pure philosophy, lower tax rates would be better. The problem is that we’ve had a 30-year referendum on spending—every aspect of the welfare state. We made a tiny bit of progress in ’81 that was restored over the course of the next couple of decades. Then we finally had Republican government in the Bush era, both in the Congress and in the White House, and nothing was cut. Everything was ratified. In fact, they added to Medicare through the drug benefit.
reason: Bush raised total federal outlays about 60 percent in 2010 dollars.
Stockman: That’s exactly right. So now we’re at the point where we have this large welfare state that seems immutable politically and this expanding warfare state that both parties seem to want to fund. In that environment, you’re kidding yourself if you think cutting taxes today is really cutting taxes. We’re simply deferring massive tax increases into the future, unfairly and immorally putting huge debt burdens on future generations, and that is just wrong.
(Article continues after the video.)
reason: There’s a presumption there that if we raise more federal revenue, it would actually go to fund existing programs, as opposed to just expanding into new areas.
Stockman: That’s always a risk, but I think there isn’t much pressure for structural expansion of the budget right now, and there hasn’t been for years—other than the one or two initiatives during the Bush period.
reason: Does there need to be, though? Medicare is set to continue to expand, particularly after 2020. So there doesn’t need to be a politician saying, “Let’s create whole new entitlements,” because we’ve got ones that are on autopilot to explode.
Stockman: Oh, yes. The cost trajectory of the entitlements and the program structure that is there will rise over time, and part of the fiscal battle will be to find ways to contain that. So I very strongly believe that, in addition to allowing the tax cuts to expire, we need to means-test—radically—the retirement entitlements.
The combination of Medicare and Social Security—a few years out, that’s $1.5 trillion of spending annually. That’s the heart of the budget, and the top one-third of that goes to retirees who have private assets, private pensions, other sources of income. They shouldn’t be dependent on the government. Nobody earned all that, and there really is no trust fund there—that’s all fiscal mythology.
rest at-
The Triumph of Politics Over Economics - Reason Magazine
The whole article is, well worth reading, since I cm limited by copy right I will just post the first few questions and video......
The Triumph of Politics Over Economics
David Stockman on TARP, the Fed, Ronald Reagan, and Ron Paul
Nick Gillespie from the April 2011 issue
At the very start of Ronald Reagan’s presidency, David Stockman debunked the myth that Reagan and the modern Republican Party were dedicated to small government.
In 1981, the 35-year-old Stockman gave up his Michigan seat in Congress to become the new president’s budget director.
reason: You’ve emerged as a fierce proponent of letting all of the Bush-era tax rates expire and going back to the Clinton rates. Why do you want to revert to higher tax rates?
David Stockman: In pure philosophy, lower tax rates would be better. The problem is that we’ve had a 30-year referendum on spending—every aspect of the welfare state. We made a tiny bit of progress in ’81 that was restored over the course of the next couple of decades. Then we finally had Republican government in the Bush era, both in the Congress and in the White House, and nothing was cut. Everything was ratified. In fact, they added to Medicare through the drug benefit.
reason: Bush raised total federal outlays about 60 percent in 2010 dollars.
Stockman: That’s exactly right. So now we’re at the point where we have this large welfare state that seems immutable politically and this expanding warfare state that both parties seem to want to fund. In that environment, you’re kidding yourself if you think cutting taxes today is really cutting taxes. We’re simply deferring massive tax increases into the future, unfairly and immorally putting huge debt burdens on future generations, and that is just wrong.
(Article continues after the video.)
reason: There’s a presumption there that if we raise more federal revenue, it would actually go to fund existing programs, as opposed to just expanding into new areas.
Stockman: That’s always a risk, but I think there isn’t much pressure for structural expansion of the budget right now, and there hasn’t been for years—other than the one or two initiatives during the Bush period.
reason: Does there need to be, though? Medicare is set to continue to expand, particularly after 2020. So there doesn’t need to be a politician saying, “Let’s create whole new entitlements,” because we’ve got ones that are on autopilot to explode.
Stockman: Oh, yes. The cost trajectory of the entitlements and the program structure that is there will rise over time, and part of the fiscal battle will be to find ways to contain that. So I very strongly believe that, in addition to allowing the tax cuts to expire, we need to means-test—radically—the retirement entitlements.
The combination of Medicare and Social Security—a few years out, that’s $1.5 trillion of spending annually. That’s the heart of the budget, and the top one-third of that goes to retirees who have private assets, private pensions, other sources of income. They shouldn’t be dependent on the government. Nobody earned all that, and there really is no trust fund there—that’s all fiscal mythology.
rest at-
The Triumph of Politics Over Economics - Reason Magazine
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