Dingus: Sequester is Kennedy’s fault
The standards for having an opinion piece in the Washington Post must’ve been lower3ed considerably, evidenced by the bit written today by Robert Samuelson who blames Kennedy’s 1964 tax cut for today’s sequester problem;
It was a disaster.
High inflation was the first shock. An initial boom (by 1969, unemployment was 3.5 percent) spawned a wage-price spiral. With government seeming to guarantee 4 percent unemployment, workers and businesses had little reason to restrain wages and prices. In 1960, inflation was 1 percent; by 1980, it was 13 percent. The economy became less stable. From 1969 to 1982, there were four recessions, as the Federal Reserve alternated between trying to push unemployment down and prevent inflation from going up. Only in the early 1980s did the Fed, under Paul Volcker and with Ronald Reagan’s support, crush inflationary psychology.
[…]
Since Kennedy’s tax cut passed in 1964 — after his assassination — there have been 43 budget deficits and only five surpluses (1969, 1998, 1999, 2000 and 2001). Even the surpluses reflected luck more than policy. The last four resulted mostly from the 1990s economic boom, boosting tax revenue, and the end of the Cold War, lowering military spending.
Nice try. But ya know what else happened in 1964? Lyndon Johnson’s Great Society and the introduction of combat troops to Vietnam because of the manufactured Gulf of Tonkin incident. In January 1969, the lame duck Congress voted to dip into the Social Security trust fund to pay for the massive spending that welfare and the war were eating up. In 1971, Richard Nixon launched the Wage & Price freeze. In 1979, Jimmy Carter founded the Education and Energy Departments. If you’re looking for reasons to blame for federal deficits, I wouldn’t look at cutting taxes – I’d look at government spending instead and resolute adherence to liberal economic policies that just don’t work.
But, then the Washington Post is trying to support the President’s policy of raising taxes, despite the fact that tax cuts result in increased revenue – evidenced most recently by the Bush tax cuts in the 2000s.
Category: Barack Obama/Joe Biden, Taxes
Samuelson is either an idiot or is dissembling.
As Jonn correctly notes, Federal spending caused by the attempt to simultaneously institute LBJ’s “Great Society” and fight the Vietnam War is what generally what’s believed to have caused mid-1960s inflation. Absent either, the massive increase in inflation likely would not have occurred. Absent both, that’s a virtual certainty.
Zombie Andrew Jackson is sorely needed in such dire times. My favorite US president a fiscal hawk and all around ass kicker. Democratic party sure has strayed from its roots. Go get ’em zombie Jackson and give the French hell as well just for good cause!
Lets really get this rolling and go all the way back and blame Woodrow Wilson the first progressive President, who created the the personal income tax allowing the federal government to rapidly expand and thus control. Oh and the 17th amendment thing he did basically removing the States voice from the federal government. Well at least the republic was able to withstand it for about 100 years….
By the way: here are the annual inflation figures for the Vietnam War period (1965-1972), with 1964 also presented for comparison.
1964 – 1.28%
1965 – 1.59%
1966 – 3.01%
1967 – 2.78%
1968 – 4.27%
1969 – 5.46%
1970 – 5.84%
1971 – 4.30%
1972 – 3.27%
source: http://inflationdata.com/inflation/Inflation_Rate/HistoricalInflation.aspx
The worst of those years is better with respect to inflation than any of the years during the Carter administration (1977-1980).
So is every year after 1981.
Well, it seems they finally stopped blaming Bush for everything at least.
Oh, and if you really want to see Progressive policies in action when it comes to inflation – check out Woodrow Wilson’s 2nd term (1917-1920). That was 4 consecutive years of 15+% annual inflation – the only four such years since 1912. Due to the effect of compounding, over those 4 years the cost of living in the US cumulatively went up nearly 85% (84.6+%, to be precise).
Even World War II, Korea, and the Carter years weren’t as bad, inflation-wise. That’s the worst 4-year run in US history since at least 1912 (I say “at least” because the data in the link in comment 4 above only goes back to 1913).
Reason has a series of stories which demonstrate that since WWII tax revenues have stayed within a percent or so of 19% of GDP regardless of rate. That’s it, that’s the perfectly predictable amount of revenue that the government can expect in any given year and so they should be able to target their spending accordingly. Of course they don’t, it’s far easier to buy votes with debt that has to be accounted for at some future date when all of our congresscritters will be gone from office which is why we are in the mess we’re in now (see also almost every other industrialized nation in the world).
Sure. Blame the dead guy.