Purposeful or not, he might have been successful in shrinking government spending. Here is Mankiw on a topic that's been hesitantly brought up here before, "starving the beast":
quote:
Starve the Beast
In today's NY Times, Paul Krugman suggests that the Starve the Beast theory--tax cuts lead to smaller government--is true, albeit with a lag:
The Obama plan is also far more progressive, sharply reducing after-tax incomes for the richest 1 percent of Americans while raising incomes for the bottom 80 percent. But while $700 billion may sound like a lot of money, it’s probably not enough to pay for universal health care, which was supposed to be the overriding progressive priority in this election.
Why doesn’t Mr. Obama propose raising more money? Blame the Bush poison pill....
looking at the tax proposals of the two presidential candidates, it’s remarkable and disheartening to see how effective President Bush’s fiscal poison pill has been in restricting the terms of debate.
In other words, according to Krugman, the Bush tax cuts may well cause government under President Obama to grow less than it otherwise would.
Roughly the same story was told in Robert Reich's highly entertaining memior of the Clinton years, Locked in the Cabinet. Reich suggests that the Reagan tax cuts and resulting deficits constrained the Clinton administration from pursuing all the spending programs that Reich wanted.
Krugman and Reich view this situation as entirely negative, as they favor increased government spending. But for those classical liberals who prefer smaller government, their storyline supports the well-known and often maligned Starve the Beast theory.
Originally posted by heckofajobBrownie: Tupa, I'm sure you saw the Tax Policy Center breakdown of the two tax policies.
Neither is very good for the budget picture.
Wasnt that the point I spent Feb-May trying to make? Both have tax policies that are ludicrous (although McCain's reasons appeal to me more). One has a spending policy even more absurd. If you are looking for the one that will be more fiscally responsible, I think McCain has to win. Their numbers crunch similarly when Obama's best case health care numbers are used, and McCain has a record dating back to the dinosaurs of being strong on fiscal restraint. Now Krugman tells us that lower taxes actually restrain government spending. Chalk up a point for Big Mac.
Ha. I'm glad to see you've fallen under Paul Krugman's spell.
Of course, I don't mind if the government spends more. It depends on what they spend it on and how they pay for it.
If it's a better health care plan, that's a good way to spend tax dollars. If it's a shitty farm bill laden with subsidies and a Pentagon budget as bloated as a dead whale on the beach? Not so much.
(Kudos to Robert Gates for taking a small stand on this the other day.)
And before you mention Obama's posturing on the farm bill, I know, I know...
