Starve the beast

From Wikipedia, the free encyclopedia

 This article has been nominated to be checked for its neutrality.
Discussion of this nomination can be found on the talk page. (December 2007)

"Starving the beast" is a fiscal-political strategy of some American conservatives [1] [2] [3] to use budget deficits via tax cuts to force future reductions in the size of government. The term "beast" refers to government and the programs it funds, particularly social programs such as welfare, Social Security, and Medicare.

US President George W. Bush has invoked the concept in reference to his administration's tax cuts. He has said "so we have the tax relief plan [...] that now provides a new kind -- a fiscal straightjacket for Congress. And that's good for the taxpayers, and it's incredibly positive news if you're worried about a federal government that has been growing at a dramatic pace over the past eight years and it has been." [4]

Republican presidential candidate Fred Thompson's tax-cut plan, incorporating a flat tax, also defers paying for the larger deficits it would create. [5] It "would most likely be funded by lower government spending on Social Security and Medicare benefits" according to the Wall Street Journal.[6]

Contents

[edit] History

Prior to being elected as the President, then US Presidential candidate Ronald Reagan described the strategy during the 1980 US Presidential debates, saying "John Anderson tells us that first we've got to reduce spending before we can reduce taxes. Well, if you've got a kid that's extravagant, you can lecture him all you want to about his extravagance. Or you can cut his allowance and achieve the same end much quicker." [1] It appears the earliest reference to "starving the beast" as such was former Reagan budget director David Stockman's 1986 book The Triumph of Politics: Why the Reagan Revolution Failed. Stockman was quoting an anonymous Reagan staffer.

[edit] Impact

A well-known proponent of the strategy is activist Grover Norquist. [7][8] Vice-President Dick Cheney said "Reagan proved deficits don't matter" as then-Treasury Secretary Paul O'Neill warned of financial dangers presented by them ahead, according to O'Neill. [9]

Some empirical evidence shows that such a strategy may actually be counterproductive, with lower taxes actually corresponding to higher spending. A October 2007 study by Christina D. Romer and David H. Romer of the National Bureau of Economic Research found: "[...] no support for the hypothesis that tax cuts restrain government spending; indeed, [the findings] suggest that tax cuts may actually increase spending. The results also indicate that the main effect of tax cuts on the government budget is to induce subsequent legislated tax increases."[2]

[edit] See also

[edit] Citations

  1. ^ Mallaby, Sebastian. Don't Feed the Beast: Bush Should End This Tax-cut Myth. The Washington Post. May 8, 2006.
  2. ^ Christina D. Romer, David H. Romer. "Do Tax Cuts Starve the Beast: The Effect of Tax Changes on Government Spending. National Bureau of Economic Research. Working Paper No. 13548. October 2007.

[edit] Further reading

[edit] Trivia

A argument in favor of starving the beast was made by fictional presidential candidate Arnold Vinick in The West Wing in his debate with Matthew Santos.