If we're going to restore the Clinton tax rates . . .

. . . why not also bring back back the Clinton spending cuts?"

In his eight years as President, Clinton reduced federal spending to 18.2 percent of GDP from 22.1 percent, thanks in large part to a Republican-controlled Congress that forced the issue.  Defense spending as a portion of GDP declined by 1.8 points, but non-defense spending dropped by 2.2 points.  Clinton and the Republicans in Congress cut spending on domestic discretionary programs as well as entitlement spending through welfare reform.

Comments

[Jack]

I am surprised we do not see the following simple and correct argument not mentioned (it's not mine, obviously): "Suppose we raise tax rates on 'the rich' a great deal. Okay. We still are nowhere close to bringing the deficit to somewhere manageable."

I've read estimates of 10-20 percent only, *and* that is assuming little or no dynamic response -- labor supply changes or tax strategy changes in response to tax rates changes.

Whatever one thinks of tax rates today being too high, too low, or what, it remains that it is secondary to the issue of unavoidable spending cuts, particularly in entitlements.