Voodoo economics has made a triumphant return to Capitol Hill in the debate over deficits and raising the national debt limit.
Take Rep. Tim Scott (R-SC) — a high profile freshman, popular with the tea party. After a GOP caucus meeting Friday morning, he explained to a group of reporters that even if tax increases could pass the House, they would hasten a debt crisis.
“Tax increases only makes the situation worse, and at the end of the day it has the exact opposite effect that we would think that it would have,” Scott claimed. “Fewer revenue dollars.”The exact opposite is true — tax increases have been a successful part of every deficit reduction plan, and President Bush’s giant tax cuts in 2001 and 2003 dramatically increased deficits. So I asked Scott how tax increases exacerbate the debt situation.
“At the end of the day the fact of the matter is we’ve spent more money than we’ve been taking in,” he said. “We do not have a taxing problem. We don’t have a revenue problem. We actually have a spending problem. So if you increase taxes in order to spend more money, you’ve not solved the problem, you’ve only dug a deeper hole.”
This actually contradicts his original supply-side explanation. If tax increases reduce revenue, then tax increases can’t be used to finance more government spending. The upshot, though, is that the GOP is still locked into opposition to tax increases, whatever the explanation.