Re: Fiscal Cliff Deal: $1 in Spending Cuts for Every $41 in Tax Increases

From the Head of Harvard's Economics Department

The fiscal deal struck last night makes one thing clear: President Obama must have really hated the recommendations of the bipartisan Bowles-Simpson commission that he appointed. The commission said that we needed to reform entitlement programs to rein in spending and that increased tax revenue should come in the form of base broadening and lower marginal tax rates. The deal appears to offer no entitlement reforms, no tax reform, and higher marginal tax rates. After all the public discussion over the past couple years of what a good fiscal reform would like like, it is hard to imagine a deal that would be less responsive to the ideas of bipartisan policy wonks.

On Tuesday, January 1, 2013 12:33:09 PM UTC-5, Lynne wrote:

Excellent. Then we can pay down the debt. Sounds like a plan

Sent from my Samsung smartphone on AT&T

lew <lew...@aol.com> wrote:

>Fiscal Cliff Deal: $1 in Spending Cuts for Every $41 in Tax Increases
>
>
>by Matthew Boyle31 Dec 2012
>biggovernment.com
>
>According to the Congressional Budget Office, the last-minute fiscal
>cliff deal reached by congressional leaders and President Barack Obama
>cuts only $15 billion in spending while increasing tax revenues by
>$620 billion—a 41:1 ratio of tax increases to spending cuts.
>
>When Presidents Ronald Reagan and George H.W. Bush increased taxes in
>return for spending cuts—cuts that never ultimately came—they did so
>at ratios of 3:1 and 2:1.
>
>"In 1982, President Reagan was promised $3 in spending cuts for every
>$1 in tax hikes," Americans for Tax Reform says of those two
>incidents. "The tax hikes went through, but the spending cuts did not
>materialize. President Reagan later said that signing onto this deal
>was the biggest mistake of his presidency.
>
>"In 1990, President George H.W. Bush agreed to $2 in spending cuts for
>every $1 in tax hikes. The tax hikes went through, and we are still
>paying them today. Not a single penny of the promised spending cuts
>actually happened."
>
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