Tuesday, October 29, 2013

The Fuss Over Federal Spending

One is tempted simply to repeat, over and over, "taxes are what we pay for a civilized society". My favorite stand-in for Holmes in today's world is Judge Richard Posner, who has blogged a useful reminder of Holmes's aphorism:
Is it realistic to think federal spending could be cut substantially. . . ? The answer, I think, is no, provided the focus is limited to the short run—the next few years. . . . Of course there is a large federal deficit, but it is quite manageable with modest increases in income tax rates coupled with broader coverage obtained by reining in some deductions and exclusions. The experience of the George W. Bush Presidency is that reducing federal income tax rates from the level that prevailed in the 1990s does not promote economic growth, though it does increase economic inequality. . . . Regarding any increase in taxation as anathema, conservatives want to shrink the federal government by drastically reducing federal spending, even if that means underfunding research, national defense, the air-control system, flood control, law enforcement, and other normal government expenditures. That is not a promising approach.