There are Downsides to Tax Cuts?

, Malcolm A. Kline, Leave a comment

federal reserve photoOne of the scholars at the recent Philadelphia Society conclave of conservative intellectuals found an unexpected downside to tax cuts.

“Congress voted against Grover Cleveland’s tariff cuts arguing that government will become bigger because of all the money coming into the Treasury,” Brian Domitrovic of Sam Houston State University said at the Society’s meeting in Charlotte, North Carolina last weekend. “When Alan Greenspan gave a speech that growth would lead the government to pay off the federal debt, the prospect that it would scared the Federal Reserve Board.”

Unfortunately, this is not a fate that is imminent. “With the end of the Obama Administration, this country will have gone 16 consecutive years without a budget,” Harry Veryser of the University of Detroit Mercy pointed out at the Philadelphia Society meeting. “Since 1913, every fiscal restraint has been removed step by step.”

For one thing, Veryser noted, “war changes currencies.” For example, in the aftermath of World War I, “when Warren G. Harding ran against the Democrats, he ran against the ’50-cent-dollar.’” Yet and still, half a century later, one of his Republican successors pursued diametrically opposite policies when “Nixon took us off the Gold Standard.”

“It took the Romans 200 years to do what these characters did,” Veryser observed. A fellowship of conservative intellectuals, the Philadelphia Society was formed in 1964 in the wake of the Goldwater defeat.

Photo by Craig Hatfield

Photo by Craig Hatfield