From: cortez@milton.u.washington.edu (Tom Warner)
Subject: Re: Clinton's Economic plan attacked (Wall Street Journal Aug 5)
Organization: University of Washington, Seattle
Date: Sun, 23 Aug 1992 01:46:04 GMT

>
>Two things in life are certain: Death and Taxes. With Death it doesn't
>get worse if the Democrats are elected.

Well, at least this one isn't falsely attributed.

But think about it: have Reagan and Bush held down taxes? No. They've raised
taxes, especially on the lower-middle and middle classes.

True, neither planned to. But the myth of the spend-crazy Congress forcing them
into it is pure hogwash. Neither Reagan or Bush could agree to cut spending in
*their* (military) programs, and Congress wouldn't agree to completely gut
*their* (social) programs. So the compromise was to run a deficit. This was
the agreed to compromise of Reagan and Congress.

The problem was, Reagan was just too much of a demagogue to understand that
his trickle-down theory wouldn't work: he actually believed that there would
be so much growth generated by his 1981 tax cuts that there would be no deficit.
But there was a big deficit. And with that big deficit, came a new item on the
federal spending map: interest on the national debt (it had been there before
Reagan, but never as a major part of the budget).

When Reagan passed the tax hike of 1982, which basically just reversed the tax
cut of 1981 and re-apportioned the taxes to bear more heavily on the less
wealthy among us, it still wasn't enough to catch up. So for the rest of
Reagan's term, we had Reagan and Congress not being able to agree on a balanced
budget, thus further deficits, thus a larger interest on the national debt,
and thus a deeper hole to dig out from next year. This ran all the way through
to 1989, and even though Congress did give a great deal of ground in social
spending, and even though there was modest growth throughout the last 6 years
of Reagan's term, it never was enough to catch up to the accumulating debt.

Enter Bush in 1989, with a maverick promise of "no new taxes." Problem was,\
Bush was no better than Reagan at reaching budget compromises with Congress.
Meanwhile, even with all of the Reagan-term slashes to social spending, the
interest was so large now that annual deficits went through the roof. By 1990,
the only way Bush could pay the government's bills was to sign a tax increase.
It wasn't a "mistake" -- his only other choice was to compromise on military
spending, which he wasn't willing to do. Without that tax increase, the deficit
would have been so high it would have worried investors in federal bonds,
probably forcing the U.S. to raise its interest rates, and thus the interest
on the national debt to phenomenal new heights.

The point is, Bush had to raise taxes, because of the original mistake of
Reaganomics that he has continued to follow. Now he is proposing across the
board tax cuts, purely as an elction year ploy. What will it lead to, in
the real world? That's right, skyrocketing deficits, interest on the national
debt eating up 30-40% of the federal budget, and of course, another tax
increase in 1994, just so the federal government can pay its bills.

Just look at the situation now: how much of your tax bill is going to the
national debt? That money is paying for nothing other than the mistakes of
two Republican administrations. The *only* way to cut taxes is to bring down
the debt, and all Bush has done is make larger and larger deficits. And that
is all he will continue to do.
 
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