Temporary Spending Quickly Becomes Permanent

I have written previously that we need proof that the government can and will cut spending before we even entertain tax increases of any kind.  That is because our political class can be expected to promise spending cuts while actually delivering tax increases.  Once the tax increases are enacted, they will then break the promise to reduce spending.

Writing at National Review’s The Corner, Veronique de Rugy posts an interesting chart from Matt Mitchell that demonstrates another scary phenomenon — the permanence of temporary spending:

A year ago, the CBO estimated that the 2009-2010 spending increases would cause a temporary spike, with spending dropping down to near the historic average over just a couple of years.  Now, the CBO is estimating that the increased spending as a share of GDP will remain with us as the new normal.

The same can be expected of any temporary tax increases.  Eventually, enterprising politicians will realize that it is easier to extend a temporary tax increase than to initiate a new one.

This is why the Republicans absolutely have to stand firm on tax increases when Obama’s deficit reduction commission recommends a mix of tax increases and spending reductions in its report.   The federal government — this includes the Republicans — must first prove that it will enact spending cuts before tax increases are even discussed.  Otherwise, spending will simply continue to climb up to new permanent levels, with higher taxes and/or more debt to pay for it.

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Published in: on September 7, 2010 at 4:46 pm  Leave a Comment  

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