We are soon to revert to the Clinton income-tax rates last used in 2000, when we ran budget surpluses. If likewise we were to cut the budget, or just hold federal spending to the rate of inflation, America would soon run surpluses as it did a decade ago. For all our problems, the United States is still the largest economy in the world, its 300 million residents producing more goods and services than the more than 1 billion in either China or India.But... but... conservatives at National Review and elsewhere have been stomping their feet for the last 18 months about the restoration of Clinton-era marginal tax rates! Along with spending on TARP, the stimulus bill and health care bill, letting Bush-era tax cuts expire has been a central tenet of the Tea Party/conservative case that President Obama is spreading creeping socialism across this once-great land! The tax increases, in other words, are supposedly one reason for the sense of American decline.
Realistically, though, getting deficits and debts under control will take some combination of higher taxes and reined-in spending. Republicans generally offer only the second of that equation -- and then usually (but not only) rhetorically. (It can be argued Democrats have precisely the opposite problem.) Victor Hanson Davis -- in a rare non-Dowdian moment -- actually seems somewhat realistic today. Does he know what he just did? Do National Review's editors?