Bruce Bartlett (L), Dr. Alan Blinder (3L) and others listen while Dr. Heather Boushey (2L) speaks during a hearing of the House Democratic Steering Hearing on Capitol Hill July 7, 2011 in Washington, DC. House Democrats called experts in the economy to testify about the state of the United State's economy and the possible effects of the nation defaulting on its debt. (Getty)
Bruce Bartlett, deputy assistant secretary for economic policy at the Treasury Department during the Reagan administration, on Sunday derided Republican leaders for being “so g--damn dogmatic” over tax increases.
Bartlett’s remarks were made during an exchange between himself and George Mason University’s Veronique de Rugy over whether tax revenues can actually help curb future government spending.
“We need higher revenues, both to restrain spending and to change the dynamics of the fiscal process … Your idea is so g--damn dogmatic,” said Bartlett during an interview on MSNBC’s “UP With Chris.”
“You’re living in a fantasy world where we’re going to balance the budget by abolishing Medicare and other ludicrous ideas,” he added.
One of the problems with the Norquist pledge is that, if you never raise taxes, there’s never any cost to raising spending. So Veronique is essentially incorrect. She’s assuming that taxes will rise to pay for spending, but Norquist will not allow that to happen. It used to be that the main constraint on increasing spending was the fear that it would lead to higher taxes.
But if taxes never rise then you can have your cake and eat it too. We’ve reduced the tax cost of spending. Secondly, if you look at the CBO’s long-term budget forecasts, one of the main drivers, in fact the main driver, of long-term spending is interest on the debt. So if we don’t raise taxes, we’re automatically causing an increase in spending. So we need higher revenues both to restrain spending and to change the dynamics of the fiscal process.
For her part, de Rugy countered by arguing that tax revenue on its own cannot come close to offsetting the government’s “drunken sailor” spending:
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(H/T: Mediate). Featured photo courtesy Getty Images.