Thursday, November 16, 2006

WSJ

Last time I checked the government was running huge deficits. Not to mention that some our deficit calculations don't take into account Treasury IOUs to Social Security and the emergency spending for the war. The Wall street Journal editorial page is evil.
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Editorial in today's Wall Street Journal: Rubin's Tax Gambit: Raising Taxes in a Housing Slump Isn't the Smartest Policy:

[R]aising taxes amid a housing decline doesn't sound like brilliant policy to us. Depending on inflation signals in the coming weeks, the Federal Reserve may not be done raising interest rates. The best hope for avoiding a recession next year and into 2008 is that strong corporate profits and the tight job market will lift business investment and consumer spending enough to offset the impact of tighter monetary policy. The last thing the economy needs now is a tax increase, too.

And what are the urgent "fiscal problems" that justify a tax increase, anyway? As the nearby chart shows, federal revenues in fiscal 2006 were 18.4% of GDP, higher than the 18.2% post-1965 average. In October, the first month of fiscal 2007, revenues rose by 12% from a year earlier. Mr. Rubin thinks this windfall isn't enough; perhaps he wants to return to the late Clinton years, when the feds grabbed a record 20.9% of GDP and taxpayers demanded a refund by endorsing George W. Bush's tax cut proposal in the election of 2000.

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