In the New York Times earlier this month, George Mason economics professor Tyler Cowen was critical of the fact that all Republican presidential candidates stated that they would refuse a debt reduction deal that entailed $10 dollars in spending cuts, in exchange for every dollar of higher taxes.
Despite Cowen’s opinion, real world experience shows the judgment of the GOP candidates to be correct on this matter. ATR’s Ryan Ellis articulated it best in his initial response to Cowen:
Would a grand bargain with $10 in promised spending cuts for $1 in tax hikes be a good deal for conservatives? No. We have been through this before. In 1982, President Reagan was promised $3 in spending cuts for every $1 in tax hikes. In 1990, President George H.W. Bush was promised $2 in spending cuts for every $1 in tax hikes. In each case, all the tax hikes went through, since that's a matter of a single, affirmative tax law change. The spending cuts never materialized. It doesn't matter how unbalanced the promised ratio is. The first number in the ratio always has been and always will be a mirage.
Despite repeatedly pointing out that when higher taxes are on the table, lawmakers never implement necessary spending restraint, politicians, pundits, and some policy wonks still contemplate such an illusory deal. MSNBC’s Morning Joe raises the prospect of such a grand bargain on an almost daily basis. The consensus among MJ panelists, which tilts towards that of folks like Donnie Deutsch, who proclaims he would feel “privileged to pay more taxes,” is that Republicans are insane for not taking such a deal and are being unreasonable. Just this week ATR president Grover Norquist went on Morning Joe to remind viewers why such grand bargains have not worked out well for taxpayers – click here for the clip.
Historical experience aside, it was the Wall Street Journal’s James Taranto, who earlier this year best illustrated with the following story why Republicans would be foolish to entertain a deal that includes even just one cent in tax increases for every hundred dollars in spending cuts:
A man goes into a bar. Sees an attractive woman and asks,
"Would you sleep with me for a million dollars?"
After only a slight hesitation, "sure."
"Well, how about ten dollars?"
"What kind of woman do you think I am?!?"
"We've already established that. Now we're haggling over price."