Less Spending + Even Lower Taxes = Even Higher Deficits

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The Pledge to America is a bit like the Republican Party's fall season policy catalog. Republican candidates need to furnish their campaigns with positions on various policies, and the Pledge elegantly showcases various policy options for their perusing. Don't care for this Fannie and Freddie ensemble, try on this discretionary spending freeze! For one month only, Nevada's high unemployment is the perfect climate for brandishing these 'Kill the Stimulus' talking points!

As a campaign catalog, it's not particularly newsworthy. Almost all of the ideas are old hat -- except perhaps the call to privatize mortgages. As a governing platform, it's exactly what you'd expect from a party with no incentive or intent to reveal an actual governing agenda. See, something funny happens on the way to lower spending and even lower taxes: even higher deficits. From Howard Gleckman at the Tax Policy Center.

When it comes to revenues, the GOP reprises its long-term pledge to permanently extend all of the 2001 and 2003 tax cuts. Plus it adds a few more tax breaks, including a proposal to give small businesses a new 20 percent deduction. For those interested in deficit reduction, these tax cuts would dwarf any spending cuts in the GOP agenda.

Quite right. Using numbers, the Republican's most aggressive plan to cut spending would shave off $1.3 trillion in the next 10 years. Extending the full Bush tax cuts for the next decade would deprive the Treasury of three times that amount. Without further cuts, this proposal could expand our debt by $2.5 trillion, a little more than 10% of GDP in 2020. And that's assuming the harsh cuts even pass Congress.

To be sure, Democrats aren't exactly bursting forth with deficit-busting plans, themselves. And election season has long been a time to make promises that don't have the virtue of arithmetic on their side. But the bottom line is that the GOP's policy catalog doesn't include any suggestions for when we find out the deficit hawks are wearing no clothes.

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Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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