Starving The Beast

Since Reagan, Republicans have been committing deliberate sabatoge of the American economy, so far at the expense of our children. The tactic is called "starving the beast". I've been talking about this topic since the second month of this blog and a half dozen times since then. I suppose I continue to be as disbelieving that first, a loyal American would do this and that the voting public seems blissfully unaware while they too pile up their credit card accounts. While the latter appears to be true, the guys doing this are loyal to capitalism, even if it's the death of the American way of life.
Here is a post that is very visual and understandable. Even the creator of the chart is astounded by it's implications. Hat tip to Brad DeLong for the link.
Angry Bear

Even with the Bush administration's probably unrealistic goals for cutting NDNHS discretionary spending, their budget plans will result in on-budget deficits of $400-$500 bn (roughly 3% of GDP) for the next several years. And of course, this forecast assumes steady real GDP growth of roughly 3% per year. Much more likely, of course, is that there will be a recession sometime in the next five years, which will cause the deficit to be much, much larger.


But the truly remarkable thing about the graph is just how far federal revenues have fallen over the past fifty years. It appears that successive tax cuts, especially those by Reagan and Bush, have driven down federal revenues in a permanent way. Equally important, it is clear that those tax cuts have NOT driven down federal spending; the only substantial decline in federal spending happened during the 1990s, following a major tax increase in 1993. Yet more evidence that the "starve the beast" theory has the empirical validity of the Ptolomaic solar system.