Wednesday, October 20, 2010

Obama and Taxes

Thanks to the NYT for pointing out that Obama has generally lowered taxes during his reign, and that this deed is largely unacknowledged by Tea Party ilk.

But the deeper issue is that Obama is increasing federal spending. Low taxes coming from Obama now means higher taxes later, or even economic instability arising from the national debt.

Reasonable people can disagree about how large the federal government should be, but let's not pretend that the dislike of Obama coming from supporters of small government is born of confusion.

Update: Just to back up the rhetoric with some facts, here is a chart of federal spending. Note that all of the Obama spending (starting January 2009) is estimated. Let me know if you find a more up-to-date chart. Thanks to http://www.usgovernmentspending.com/ for the chart. I have not tried to independently verify its accuracy.

5 Comments:

Anonymous Yohannes said...

Yes "to spend is to tax" and a tax cut is essentially spending to the extent that it does not galvanize the economy.

But this is the first I've heard of anyone concerned about lower taxes from Obama. You may not be confused but that puts you in the minority. Many are confused - or at least hypocritical and seem to have found their long forgotten dislike of smaller government on January 2009...

5:48 AM  
Blogger My Freakwentness said...

Right, I'm confused too and there's plenty of confusion to go round. And there's plenty of hypocrisy to go round.

But still: there was an increase in government spending (and an even bigger increase in deficit spending) starting around January 2009.

7:42 AM  
Anonymous Yohannes said...

What follows is a post of trollish length, but I promise there is solid content ahead:

You're right that there was an increase. But government spending has pretty much followed the trendline of the last several years:
http://research.stlouisfed.org/fred2/graph/?chart_type=line&s[1][id]=FGEXPND&s[1][range]=10yrs - and with the trend as the baseline, it seems there's been minimal change (attributable to the stimulus and bailouts).

As far as deficit spending, that seems to have a lot more to do with the slump rather than policy (consider the last graph in relation to this one on federal revenue:
http://research.stlouisfed.org/fred2/graph/?chart_type=line&s[1][id]=FGRECPT&s[1][range]=10yrs

The long term budget does need to be tightened along the lines of your suggestions in a previous post, and it's something we (I mean you; forgot i wasn't a citizen :-)) should hold Obama accountable for. But cutting spending over the short term would *I think* be detrimental to the long term budget picture because it'd shrink GDP (and revenue) *even more*, increase unemployment *even more*, and increase the risk of deflation *even more*.

Now for perspective on the different causes of the deficit over the near to mid? future, this is the most complete and credible analysis i've come across: http://www.cbpp.org/cms/index.cfm?fa=view&id=3036

Basically - bush policies are largely responsible (even without taking his unfunded medicare prescription drug benefit into account, followed by the economy, then by the wars (that bush started and obama's keeping up).

9:47 PM  
Blogger My Freakwentness said...

Great points, I agree. I don't suppose that Obama ever promised to buck the rising spending trends or to undue the fiscal policies of Bush, but supporters of small government sure wish he would. I guess if the issue is whether or not supporters of small government are confused in disliking Obama, to some extent I should take into consideration what the spending would have looked like had McCain been elected ... if he would have spent just as much, then many small government people who use small government as a basis for going Republican are indeed confused. However, those who preferred Ron Paul over Obama were not necessarily confused, at least not in the same way.

6:31 AM  
Anonymous Yohannes said...

Good point. McCainites may be reactionary in a way I enjoy poking fun at, but those who preferred Ron Paul def. have consistent and probably legitimate objections.

8:14 PM  

Post a Comment

Links to this post:

Create a Link

<< Home