In a response to crticism that the GOP’s approach to the current economic crisis is a mixture of denial, delay, and do nothing, South Carolina governor Mark Sanford says we shouldn’t mortgage our children’s future. That’s a fine sentiment, but I didn’t see much of that argument being made before launching a war (or two) that our children will be paying for while cutting taxes at the same time, nor any mention of it when Republican senators recently voted for tax cuts worth four times as much as the stimulus package over the next ten years. Double standards much?
Cutting taxes to stimulate the economy doesn’t do much good if people don’t have the earnings to tax in the first place, or money to buy products produced by businesses whose taxes have been cut (and which, by the way, if there’s no market for their products, will not hire people to produce them, will not produce them, and will simply pocket the tax credit for losses over the last five years). Tax cuts as a central tenet of fiscal policy have failed. Destroy people’s understanding of the taxes they pay and what they pay for, as has been done systematically over the last thirty years, and you end up the “money for nothing, get your chicks for free” mentality.
Put side by side with government spending, I’ll take the government spending practically every time. Public spending will actually put people to work, build at least some new infrastructure (or repair the old), put money in people’s pockets (at least some of which they will spend), and get money flowing through the economy. Reducing tax rates prospectively on businesses that reinvest profits in new capital, new technology, and job training could help keep the momentum going, but it’s going to take a big shot of spending at street level to get things moving again.
Mortgaging our children’s future? Either way, tax cuts or government spending, that seems to be what we’re doing. But I’d rather use the proceeds from that mortgage to give them something worth having.