The Breathtaking Narrow-Mindedness of Eric Cantor
Eric Cantor's position on tax increases is like the Ghostbusters' position on crossing the streams. It's like Meatloaf's position on that. His position is never, not ever, absolutely not, no way, not unless something extraordinary happens, and only then ... probably not! Literally, the Republican House Whip said he won't consider raising taxes until our unemployment rate is under 5 percent. Eric, that could be more than a decade from now.
I'm not annoyed merely as liberal lover of planning new taxes (although that I am). I'm annoyed as a student of history. Eric Cantor loves Ronald Reagan. A lot. And you know who did raise taxes in the middle of a recession with unemployment way over 5 percent, and then plenty of times in the years after to help close the deficit? Ronald Reagan. Here, I'll let his economic guru Bruce Bartlett tell the story:
In 1982 alone, [Reagan] signed into law not one but two major tax increases. The Tax Equity and Fiscal Responsibility Act (TEFRA) raised taxes by $37.5 billion per year and the Highway Revenue Act raised the gasoline tax by another $3.3 billion.
According to a recent Treasury Department study, TEFRA alone raised taxes by almost 1 percent of the gross domestic product, making it the largest peacetime tax increase in American history. An increase of similar magnitude today would raise more than $100 billion per year.
It doesn't end there, Bartlett says. In 1983, Reagan raised the Social Security tax rate. In 1984, Reagan signed another increase in the Deficit Reduction Act. That was 0.4 percent of GDP. And again in the Consolidated Omnibus Budget Reconciliation Act of 1985. And again in the Tax Reform Act of 1986, and the Omnibus Budget Reconciliation Act of 1987. Barlett concludes that "the net effect of all these tax increases was to raise taxes by $164 billion in 1992, or 2.6 percent of GDP. This is equivalent to almost $300 billion in today's economy."
Cantor advertises his deficit-hawk bona fides by claiming that he's stingy with the budget, but stinginess isn't nearly enough to close our long-term deficit. Cantor has been intractable on making the Bush tax cuts permanent; eliminating the estate tax forever; refusing to pay for lost revenue after patching the AMT; and calling for every possible deduction to capital gains and dividends taxes. Here's a strategy that would unquestionably bury the country in not billions, but trillions of dollars of additional debt that Cantor would apparently never agree to reclaim with additional taxes. That's not the resume of a fiscal hawk. It's the resume of a fiscal vulture, eager to pick at the morbid remains of whatever is left of America's finances in the next generation.
Oh hey Robert Samuelson, if you want to find what would freak out America's investors about our debt solvency, call this number and ask for Eric.