I always enjoy reading Jonathan Rauch, because even though he often departs from the right’s policy prescriptions, his fundamental worldview remains that of the conservative/libertarian. He is at his best when he points out that certain things we support can produce consequences that we most likely do not.
In this month’s Atlantic Rauch takes on that most sacred of conservatism’s cattle, tax cuts. Ronald Reagan, of course, popularized the idea that by cutting taxes it was possible to reduce the size of government by "starving the beast." If revenues fell, the argument went, legislators would have no choice but to exercise fiscal discipline.
The problem, of course, is that this is precisely what didn’t happen. Government spending has soared in the past five years, just as it soared in the 1980s--in the wake of significant reductions in income tax rates. The missing tax revenue, Rauch argues, was quickly made up through borrowing, and as a result the whole episode sent the mistaken and dangerous message to taxpayers that it was possible to keep all of their favorite programs fully funded, but with less money. On the contrary, he claims, in the 1990s Bill Clinton raised taxes, and the ensuing years saw actual decline in the size of the federal government. This was not surprising, because now taxpayers recognized the pocketbook effect of big government.
I think Rauch tends to give the lawmakers of the 1990s too much credit--the cuts of that decade stemmed less from taxpayer outrage than the impression (mistaken, as it turned out) that the end of the Soviet Union meant that the United States could gut its armed forces. Nevertheless, in a period of runaway spending under the administration of an allegedly conservative president, we would be foolish to dismiss Rauch’s central point--it’s hard to starve a beast when it has so many credit cards.