Did the Bush tax cuts increase or reduce revenue?

During my segment on the Morning in America show with Steve Hayward today, I tossed out the idea that—contrary to Laffer Curve expectations—the Bush tax cuts didn't actually increase revenue to government. That apparently resulted in some controversy after I left the air, with callers saying that I'm dead wrong on the topic.

The easiest response here is to note that before the Bush tax cuts were enacted in 2001 and 2003, the federal government had a surplus of money to fund its operations and pay down the country's debt. After the tax cuts were enacted, we started borrowing money on a full-time basis.

That's not proof on its own, of course, because we tacked on some new spending obligations during the Bush Era—most notably the wars in Iraq and Afghanistan, increased national security spending aside from those wars, and the expansion of Medicare benefits to cover prescription drugs.

So, hey, let's look at the revenues:

Bruce Bartlett writes: "According to a recent C.B.O. report, (The Bush tax cuts) reduced revenue by at least $2.9 trillion below what it otherwise would have been between 2001 and 2011. Slower-than-expected growth reduced revenue by another $3.5 trillion.

"Spending was $5.6 trillion higher than the C.B.O. anticipated for a total fiscal turnaround of $12 trillion. That is how a $6 trillion projected surplus turned into a cumulative deficit of $6 trillion."

But don't just take the CBO's word for it. Greg Mankiw, a Harvard economics professor, once called advocates of the lower taxes/higher revenue theory "charlatans and cranks": "I used the phrase 'charlatans and cranks' in the first edition of my principles textbook to describe some of the economic advisers to Ronald Reagan, who told him that broad-based income tax cuts would have such large supply-side effects that the tax cuts would raise tax revenue. I did not find such a claim credible, based on the available evidence. I never have, and I still don't."

Mankiw, of course, was one of George W. Bush's top economic advisers from 2003 to 2005. He wrote the paragraph above in 2007. And he was an advocate of the tax cuts—not because they raised revenues (he didn't believe they did) but because he believed they helped spur demand in the face of a challenging economy at the time. So: Not even Bush's own economic advisers who favored tax cuts believed they raised revenues. If that's the case, why should the rest of us?

On a related note: after I left the air Steve apparently chastised me a bit for not providing a top tax rate that's appropriate in a market economy like ours. Fair enough, I guess, but I think it's something of a mug's game to pick a number and stick to it. Different tax rates will be appropriate at different times, depending on the economy, the needs of government—being at war, for example, is more expensive than not being at war—and so forth. I'm not interested in confiscatory levels of taxation—unlike some liberals, I don't hearken back to the Eisenhower-era 90-percent marginal rate on top earners—but I also think we're a long way from there. Perhaps the answer "it depends" isn't rigorous enough, but it also has the advantage of being true.

Welcome "Morning in America" listeners!

Thanks to all of you who listened to me with Steve Hayward this morning. I co-write the RedBlueAmerica column with my conservative friend Ben Boychuk. We also co-produce a regular podcast—our latest episode is a discussion of the "Occupy Wall Street" phenomenon with City Journal's Nicole Gelinas. Give it a listen!

More guns, more death

Whenever a gun massacre happens—at Virginia Tech, say, or someplace else—we usually get a revival of the mostly neutered gun debate in this country. Some liberals decry lax gun laws, some conservatives suggest that if only everybody was armed you'd somehow see less gun violence.

A new study from the Violence Policy Center suggests the conservative analysis is wrong:

States with higher gun ownership rates and weak gun laws have the highest rates of gun death according to a new analysis by the Violence Policy Center (VPC) of just-released 2008 national data (the most recent available) from the federal Centers for Disease Control and Prevention’s National Center for Injury Prevention and Control.

The analysis reveals that the five states with the highest per capita gun death rates were Alaska, Mississippi, Louisiana, Alabama, and Wyoming. Each of these states had a per capita gun death rate far exceeding the national per capita gun death rate of 10.38 per 100,000 for 2008. Each state has lax gun laws and higher gun ownership rates. By contrast, states with strong gun laws and low rates of gun ownership had far lower rates of firearm-related death.

And here's the graphic overview:

This makes sense, of course, because the only purpose that guns have—when used—is to inflict injury and death. More guns naturally means guns will be used more, which naturally means more people will die. This isn't complicated.

This is particularly notable because, as Frank Bruni discusses in the New York Times today, there's a move among Republicans in Congress to force states with tight concealed-carry laws to recognize and allow concealed-carry permits from states with laxer regulations. (Thanks to the vagaries of Pennsylvania law, we in Philadelphia sometimes find ourselves awash in Florida-permitted guns ... with permit-holders often being people who have never been to Florida.) It's basically a law that would permit Wyoming to export its death rate to Massachusetts.

Second Amendment advocates, I suppose, will talk about Constitutional rights and the costs of freedom. But we should recognize those costs. Guns are not benign instruments.

Andrew Stiles is wrong: The problem with the economy is lack of demand.

At NRO, Andrew Stiles tries to prove the "regulatory uncertainty" canard is actually true:

A new Gallup survey asked small-business owners an open-ended question about what they viewed to be “the most important problem” facing the small-business community. It’s not “lack of demand,” as Democrats like to argue. In fact, 22 percent of respondents listed “complying with government regulations” as their top concern.

Here's the graphic that Stiles uses as supporting evidence:

Notice anything about items 2 and 3 on that list? "Consumer confidence" and "lack of consumer" demand" are parsed out as two different items, but the effect is the same: Consumers who aren't confident are consumers who aren't buying stuff—thus, they're not demanding the products that businesses provide. Add those two up, and 27 percent of small-business owners see some variation of the demand side as being the biggest problem with the economy.

Which is, ahem, more than say the same for "regulatory uncertainty."

Stiles is guilty of doing some cherry-picking, too, because later on in the same poll, business owners are asked what they need to see in 2012 in order for their business to thrive. Here's that graphic:

Check it out: The number of business owners who see regulations as the big problem suddenly drops by 10 percent when they have to name the thing that would make their business better.  Sales increases is No. 1. "Job creation" is No. 2—and I don't think it's a stretch to suspect that what business owners here want is for more of their customers to have jobs so they'll start buying stuff again.  Add in "improved economy" in at fourth place, and suddenly you have 37 percent of business owners suggesting that demand is what stands between them and success ... and just 12 percent citing government regulations.

Which makes intuitive sense. Businesses don't like dealing with paperwork and regulations, of course; no one does. But more business owners know that it's not the government that's holding them back right now. It's lack of demand. And we know why there's a lack of demand. Solve that, and we begin to move forward again.

At the pizza joint.

Taken at Lazaros Pizza House

On gay marriage: Civil liberties are not a zero-sum game

I respect Rod Dreher's work on most things, even though I disagree with much of it, because he's thoughtful and eloquent and tries to think outside his own biases. Except when it comes to matters of sexuality: Then turns a bit shrill. So it is today, when he posts the story of a U.K. "housing manager" who received a demotion for criticizing gay marriage—on his own time. Says Dreher: "Move along, nothing to see here. It didn’t really happen, and if it did, this man, History’s Greatest Monster, must have deserved it for his thoughtcrime."

This is part of the argument made by Dreher—and anti-marriage conservatives more generally—that allowing gay marriage will necessarily entail a restriction on the rights of Christians to hate gay marriage. There's just one problem with the evidence they marshal in support of the argument: It's almost always from Europe, and Europe has a very different tradition with regards to civil liberties than the United States.

For example: I’m from Kansas, home to the notorious Fred Phelps family—the folks who display a kind of homophobia far beyond what’s on display in Dreher's example. And a number of family members have been employed over the years as state or county civil servants—despite the fact that the family is held in very low esteem by the community at large. The state doesn't have the right to boot them for privately held opinions—even those that are publicly expressed—that don't interfere with the performance of their duties. What's more, we're the same country where the ACLU defends the rights of racists to march in public.

This isn't to say Dreher's nightmare scenario can't happen here: We must always be vigilant in defense of our rights. But it's much, much, much less likely to happen—and it's unlikeliness makes Dreher's concerns seem desperate instead of considered. The great thing about the First Amendment is that it protects people with wildly differing—even diametrically opposed—outlooks on life. In the United States, at least, civil liberties aren't a zero-sum game. In my ideal future, homophobic old housing managers will be able to keep their opinions and their jobs in the same society in which gays, lesbians, and transgender people are free to exercise their rights to marry each other. The day can't come too soon.

Mitt Romney, public health, and illegal immigrants

Kevin Drum takes stock of the "controversy" surrounding RomneyCare and the fact that illegal immigrants can get some medical care on the tab of Massachusetts taxpayers:

Somebody in a rival campaign presumably thinks this is a useful campaign issue because the slavering masses of the tea party base won't be appeased until illegal immigrants are literally writhing in the streets while doctors walk by and pointedly ignore them. Allowing them access to even last-ditch health services is unacceptable, even if the pointy-heads insist that we're saving money in the long run because it keeps them out of emergency rooms.

At the risk of sounding collectivist, one of the reasons we have public health efforts is because health is so often collective. That illegal immigrant writhing in the street—and this imagery might be unfortunate—might have a communicable disease, and refusing to offer care to that person might end up communicating that disease to you. Giving them a free dose of penicillin might stop the infection in its tracks ... unless, of course, we decide that the immigrant shouldn't get that dose because, goshdarnit, America!

We provide public health services to the public—including illegal immigrants—not just out of some misguided bleeding-heart do-gooderism, but because it also protects the rest of us from epidemic and death. Think of it this way, immigration hawks: It's like building an electrified border fence around your physical well-being.