Douglas Holtz-Eakin on Stimulus, Spending and Tax Increases

By February 27, 2009Economy, Taxation

Smart commentary on the PBS Newshour last night from Douglas Holtz-Eakin, the former director of the Congressional Budget Office. From NRO, The Corner:

Putting aside the philosophical differences about using the income tax for redistribution, I think these tax increases run into two problems of logic. The first is that, when this stimulus bill was passed, a lot of the spending occurred past 2010 into 2011, 2012, 2013, and that was defended by saying, “Gee, the economy might still be weak. We can’t possibly stop spending.”

Well, they’re now going to turn around and whack it over the head with a big tax increase. Those two shouldn’t be around at the same — they don’t make any sense.

The second is, our fundamental problem over the long term is spending. And we won’t tax our way out of that problem. There’s no economist who believes we can raise taxes enough to cover our long-term spending bill.

This budget gets us off on the wrong foot, because where it does cut spending, it turns right around and spends it again on something else. It doesn’t on net put any controls on spending. And spending is the ultimate fiscal discipline. That’s what we need.

Leave a Reply