Posted on Thursday, August 26, 2010 - 02:52 pm:

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if tax cuts are the answer, why did Bush have an end date attached to them?

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In 2001 I was Senate Majority Leader Trent Lott’s tax policy staffer and was deeply involved in the procedure and tactics of the 2010 sunset date. Dr. Krugman suggests that we Republicans “used” the 2010 sunset date “to disguise” their revenue effect. He has his facts wrong. We wanted the tax cuts to be permanent. Since we were using reconciliation with a 10-year budget window, had we extended the tax cuts even for “that last year [2011],” we would have given 41 Senate Democrats the ability to kill the bill on a Byrd Rule point of order. We ended the tax cuts after 2010 because we had to, not because we saw some rhetorical advantage to doing so.

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Posted on Thursday, August 26, 2010 - 08:10 pm:

• Unemployment at record levels
• Dow drops below 10,000 again
• New housing starts lowest in recorded history
• Sales of existing homes at lowest level in 15 years
• S&P announces it is considering downgrading U.S. Treasury debt obligations

Posted on Friday, August 27, 2010 - 12:18 am:

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What, pray tell, is unfortunate about being military or ex-military and past their thirties?????

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Posted on Friday, August 27, 2010 - 09:09 am:

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ya, i did. but, i read the entire article. i didn't cherry pick. how about you? didja see what he said was really wrong w/barack's plan? this:

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Mr. STOCKMAN: The military budget got out of control, and the tax cuts went to special interests as much as they did to the broad public.

RAZ: And he noticed a problem. The government wasn't collecting enough money to cover its costs, and he started telling that to Reagan.

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So in 1985, Stockman left. Now these days, he's still a conservative and still a Republican, but he doesn't think his party is taking a responsible position on taxes any longer.

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So we're spending $3.8 trillion in defense, non-defense, entitlements, everything else, and we're taking in only 2.2 trillion. So we got a massive gap. You have to pay your bills; you can't keep borrowing from the rest of the world at that magnitude, year after year after year. So in light of all of those facts, I say we can't afford the Bush tax cuts.

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RAZ: Now, I think many people would be surprised to hear Ronald Reagan's former budget director make this argument. I mean, what happened to the idea you once pushed, that tax cuts ultimately stimulate the economy?

Mr. STOCKMAN: I think that's true. But we're in a much different world today than we were in the early 1980s. We have had a spree of debt building for the last 30 years, both in the public and in the private sector. So in that environment, the highest priority is solvency now, not incentives for growth.

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RAZ: You seem to suggest that many of our economic troubles are the result of Republican economic policies over the past few decades. You are a Republican. You are a conservative. Why do you think Republicans are largely to blame?

Mr. STOCKMAN: Because the Republicans abandoned their old-time fiscal religion in favor of two theories, which I think are now proving to be both wrong and highly counterproductive and damaging.

One was monetarism, which said let the dollar float on the international markets. Let 12 men and women at the Fed decide whether to raise or lower interest rates, and use the Fed to try to run this massive economy. What they've done instead is run the printing press; they've flooded the world with dollars. The whole monetarist policy has been a mistake.

The second thing was the perversion of supply side. Yes, there was a good idea that in certain circumstances, lower tax rates will encourage economic activity and savings. But when you make it a religion, when you make it a catechism and you say you cut taxes no matter what the circumstance, what the season, what the condition, then I think the whole idea has been perverted.

By getting off track over the last 30 years, the Republican Party has basically given up its historic view that the key thing was financial discipline, financial responsibility, and that we had to live within our means. Today, we have two free lunch parties and as a result, we're borrowing ourselves into grave danger with each passing month and year.

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And I blame Paulson on it. I blame the Bush White House. They basically sold out the birthright of the Republican Party when they bailed out Wall Street unnecessarily, in a state of complete panic in September 2008. That's really, at the end of the day, one of the greatest misfortunes in fiscal governance since the Reagan revolution tried to straighten things out beginning in 1980.

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RAZ: Do you hold President Obama and his economic policies responsible for some of this growing deficit?

Mr. STOCKMAN: Absolutely. The only thing worse than the Republican leadership position is that of the White House. I don't know how they think they're helping the economy by every month, coming up with a new plan to borrow tens of billions more, drive us deeper into debt. Never in history has anyone said that for very long, you can sustain a circumstance where the debt is growing at twice the rate of the economy.

So I think the White House with the stimulus is totally wrong. A lot of it has been wasted. Why did they put all that money in the automobile industry? There's far too much capacity already. Why did they waste the money on the housing credit? Why are they continuing to try to pump money into state and local governments? I understand there's severe budget pressure there, but the federal government is in deeper debt than the state and local governments.

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RAZ: I wonder, David Stockman, where is your political home these days? I mean, where does somebody like you go?

Mr. STOCKMAN: Well, I don't know. I think I'm in the unwashed middle, let's say, with more and more of the American people. And one of these days, I think the public is going to speak in no uncertain terms - that we've had enough of this crony capitalism, and that we're going to have to now clean things up.

At some point, we're going to either be forced to do it by the global bond and currency markets, or the American people are going to wake up and demand it through an election that really cleans house in terms of both parties and the irresponsible behavior that each of them engages in today.

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