The reasons for voodoo’s revival: In yesterday’s column, Paul Krugman issued a warning:
Voodoo economics is making a comeback! According to Krugman, Republicans are returning to an absurd old claim: Tax cuts, even large cuts, will somehow “pay for themselves.”
This is obvious nonsense, Krugman notes—but the doctrine is making a comeback. He cites Governor Brownback’s disasters in Kansas. He also offers a warning: “dynamic scoring” may be imposed at the CBO if Republicans gain control of both houses of Congress.
We’ll assume that’s a sensible warning. That said, the analysts came to us in tears concerning Krugman’s soft assessment of Republican motives.
It all started with his account of President Bush’s tax cuts. Bush never claimed that these large cuts would “pay for themselves,” Krugman correctly notes:
KRUGMAN (10/6/14): [I]t’s noteworthy that the Bush II administration—never shy about selling its policies on false pretenses—didn’t try to justify its tax cuts with extravagant claims about their economic payoff. George W. Bush’s economists didn’t believe in supply-side hype, and more important, his political handlers believed that such hype would play badly with the public. And we should also note that the Bush-era Congressional Budget Office behaved well, sticking to its nonpartisan mandate.It’s true—the Bush administration never claimed that its tax cuts would “pay for themselves.” But Krugman omits a fairly obvious part of the reason—Bush’s tax cuts were a response to large projected budget surpluses. For that reason, his tax cuts didn’t have to pay for themselves. They were presented as an attempt to return excess revenues to the taxpayers.
(Even after the first large set of tax cuts in 2001, the CBO and the OMB were still projecting future surpluses.)
If you propose tax cuts at a time of surpluses, the cuts don’t have to pay for themselves! But now, we’re back to a different time. Any future tax cuts will come at a time of budget deficits. This requires a “voodoo” rationale, as was the case under Reagan.
Finally, we reach the reason why the analysts wept. At the end of Krugman’s column, he lists two reasons why voodoo thinking is making a comeback in GOP circles. In each presentation, he seems to assume that major Republicans really believe the claim that tax cuts will pay for themselves!
Krugman seems to assume good faith—but why should anyone make that assumption? There is a different, more obvious reason for the return of voodoo thinking. Here it is:
Plutocrats always want tax cuts. In the face of budget deficits, voodoo claims must be revived to justify the cuts, whether pols believe the voodoo or not.
The plutocrats who own the pols tell them they want tax cuts. The pols—the people the plutocrats own—need a rationale.
Presto! Voodoo is back! Some Republicans may believe its claims, of course. But why would anyone want to assume good faith across the board?
Sometimes Krugman is too kind. When he is, the analysts blubber.