Wednesday, March 21, 2012

Bruce Bartlett — “Taxes and a Two-Santa Theory" -The Origin of Modern Republican Fiscal Policy

Wondering where the Ryan budget comes from?
In 1976, the journalist Jude Wanniski wrote an essay, “Taxes and a Two-Santa Theory,” little noticed at the time and virtually unknown today, that put forward a theory that has had extraordinary influence on the Republican Party. Indeed, virtually everything Republicans say about taxes and spending today echoes that theory.
Read it at The New York Times | Economix
The Origin of Modern Republican Fiscal Policy
By Bruce Bartlett
(h/t Mark Thoma)


David said...

Thom Hartmann has been talking about the "Two Santa Claus Theory" for years. Unfortunately, Thom doesn't get the bigger picture that Laffer and co. were partly right. It wasn't until I became familiar with MMT that I figured that out. Hartmann's favorite economist to have on is Ravi Batra, who mostly talks about manufacturing and tariffs and becoming an export leader again. Blah.

I'm thinking, though, that Hartmann would discuss MMT on his show were he approached about it. He has had Zarlenga of AMI, who sees another piece of the "elephant," on his program.

It's interesting that the R's have had one good idea in 40 years and are still eating the Democrats' lunch.

Matt Franko said...

right I was going to ask "Which Ryan budget?"

The Ryan budget of 2000 where he advocated for higher deficits to stimulate growth? Or the Ryan budget of today where he advocates for a balanced budget?

Ayn Rand $300 wine Ryan is an 'A number 1 moron".

Tom Hickey said...

Look deeply into Ryan's plans. There is always cover for the fiscal conservatives, but it always comes down to cutting taxes and social expenditure, and increasing military spending and stuff that favors the GOP constituency.

The two Santa theory is based on the idea of the spoils system that reforms like the civil service was instituted to put an end to. The whole GOP mantra of small government, strong military, law taxes, and traditional values (basically an appeal to religious fanatics and racists) is based on intrest politics designed to create a permanent Republican majority such as the Democrats enjoyed after the New Deal.

Right now, due to the rise of fiscal conservatism in opposition to supply siders (Cheney - deficits don't matter), there has to be some cover like talk about a balanced budget amendment that is never going to happen. As Bartlett observes, the GOP Establishment is made up of supply siders pursuing the two Santa theory, dressing it up in a way they think it will sell to the electorate in the next election.

Look at what the CBO has to say about the long term debt and deficits under the present "balance budget" plan. The plan is farce.