John McCain

Fiscal Discipline: Use Only in Case of Surplus

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Some surprisingly straight campaign talk from The Associated Press:

Republican John McCain is making promises that would cost billions of taxpayer dollars, yet he is vague about how he would pay for them. […]

McCain has pledged to balance the federal budget, although he has backed off an earlier promise to do so in his first term and now says he would do it within eight years. […]

[He] proposed a new mortgage refinancing program for struggling homeowners that could cost the government $3 billion to $10 billion. He proposed to suspend federal gas taxes for the summer months at a cost of $8 billion to $10 billion.

And McCain has several proposals whose costs are unknown, such as his pledge to give all veterans a plastic card to get medical treatment anywhere they choose, a new student loan program and tax write-offs for companies that provide Internet service to rural areas.

How would he pay for it? New user fees could pay for the gas-tax holiday, McCain adviser Doug Holtz-Eakin said. […]

[F]or all the numbers he has provided, McCain has been reluctant to say exactly which programs he would cut.

Whole thing, with plenty more details, here. I might also add that trillion-dollar wars tend to be expensive, as do plans to boost the standing military by 150,000 troops, etc.

It is perhaps noteworthy to point out that this is almost precisely the opposite of John McCain's tax/budget philosophy of 2000, when he was a big (and convincing!) budget hawk and debt-payer-downer. Here he is in his 2002 memoir Worth the Fighting For, talking about his differences with George W. Bush on that score:

He and I disagreed on tax policy. My position invited greater hostility from conservatives in the party and in the press than my support for campaign finance ever had. Republican primaries had long featured a bidding war to see which candidate could promise the biggest tax cut. I chose to offer the smallest, targeted to middle- and lower-income families, so that we could use most of the budget surplus to pay off the national debt, build our defenses, and begin to pay the transition costs of reforming Social Security and Medicare for the sake of future American generations.

Lest anyone think my positions were brave, if self-defeating, honesty obliges me to note that every poll my campaign conducted (and we took as many as we could afford) found greater support for paying down the debt than cutting taxes for upper-bracket incomes, among Republican voters as well as Democrats and independents. […] You will have to trust me that I held and expressed these views before I had survey research proving their popularity.

Readers of this website might also find of interest the selection immediately preceding the passage above:

I welcomed a greater, if still limited, role for government in national problems, anathema to the "leave us alone" libertarian philosophy that dominated Republican debates in the 1990s. So did George W. Bush, I must add, who challenged libertarian orthodoxy with his appeal for a "compassionate conservatism." He based much of his more activist government philosophy in an expanded role for the federal government in education policy and in his support for contributions that small, faith-based organizations could make to the solution of social problems. I gave more attention to national service and to a bigger role for government as a restraining force on selfish interests that undermined national unity. But his positions did him much credit, as well they should have, and they do him much credit now as he uses his presidency to advance them.

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  1. I will interject the authoritarian opinion HERE!

    Just wait, I can repeat the GOP talking points if you just WAIT….

  2. Whole thing, with plenty more details, here. I might also add that trillion-dollar wars tend to be expensive, as do plans to boost the standing military by 150,000 troops, etc.

    Cue the Paultards talking about how reason is full of pro-war neocons in 3…2…1…

  3. THERE ARE NO UNOBVIOUS WAYS TO BE ANGRY ABOUT THIS FUCKING STORY!

  4. Kerry was a neophyte compared to this guys policy acrobatics.

  5. and this is surprising . . . how?? Interesting yes, but this should come as no surprise to anyone who has paid half a minute of attention to McCain in all of his time in Washington. He is, quite simply, a National Greatness-Teddy Roosevelt conservative lover of government and interventionism. Anyone who believes otherwise simply wants to be fooled.

  6. He’s still more fiscally responsible than either Democrat. I hate this election.

  7. John McCain: B.S, M.S, Phd,

    Bull Shit, More Shit, Piled Higher and Deeper

  8. Hey Matt, is your secret last name Dowd? What is up with all of the elipses?

  9. Republican: runs up big credit card bill to pay for Las Vegas drinking/gambling spree.

    Democrat: steals his wife’s jewelry to pay for Las Vegas drinking/gambling spree.

    Some choice.

  10. “He’s still more fiscally responsible than either Democrat.”

    Well of course.

    It’s physically impossible for there to ever be any such thing as a fiscally responsible liberal democrat.

  11. He’s still more fiscally responsible than either Democrat.

    That’s like saying a person who kills 5 people is better than a person who kills 10 people.

    Saying of those people is ‘better’ than the other for killing half as many people is kind of nonsensical.

  12. I gave more attention to national service and to a bigger role for government as a restraining force on selfish interests that undermined national unity.

    I look forward to the day when we’re all doing calisthenics on the National Mall while wearing gray flannel pajamas.

  13. jackal the carlos,

    and this is surprising . . . how?? Interesting yes, but this should come as no surprise to anyone who has paid half a minute of attention to McCain in all of his time in Washington. He is, quite simply, a National Greatness-Teddy Roosevelt conservative lover of government and interventionism.

    Bingo.

    By the way welch, brevity is appreciated. I’m a little drunk and appreciate a way of telling me that mccain loves gov’t strength and knows nothing of economics.

  14. Guy Montag | May 1, 2008, 9:49pm | #
    What is up with all of the elipses [sic]?

    Ellipses indicate that text has been omitted, usually for brevity.

    If you want to read all the fluff about “quilters who are direct descendants of slaves” that the AP puts in to up the word count, by all means use the link that Matt provided for you. Better yet, here’s one you can click on without scrolling back up.

    Since you have a personal blog, I am sure you know how a link works.

  15. Since you have a personal blog, I am sure you know how a link works.

    oooh! [snaps] KELLY RIPPA!

  16. FUCK YOU JOHN MCCAIN!

  17. Exactly who does he mean by “selfish interests”? I suspect it’s libertarians who want to be left alone.
    JMR

  18. He’s still more fiscally responsible than either Democrat.

    Really? Two out of three candidates choke out a risible Gas Tax pander. Guess the letter that belongs next to the one who made fun of them for it.

  19. Most of the new spending proposals are disappointing, but I do support the improved medical benefits for veterans. After all, protecting the country is the government’s role. The principle of limited government should not restrict the military budget. The principle of not initiating force means the US should not start wars, but that is true regardless of the financial considerations.

  20. I look forward to the day when we’re all doing calisthenics on the National Mall while wearing gray flannel pajamas.

    Don’t forget the mandatory viewings of An Officer and a Gentleman.

  21. New user fees could pay for the gas-tax holiday

    You don’t really have to squint very much to see the gas tax as a user fee, so what the fuck does that mean?

  22. Most of the new spending proposals are disappointing, but I do support the improved medical benefits for veterans.

    If he were to combine the card with the privatization of the VA, we would have an interesting proposal.

    Even simpler would be to do away with the card altogether, and just fold them into Medicare (which many of them are eligible for anyway) And still privatize the VA.

    “Here’s some more ‘free’ stuff for an important constituency of mine” kind of leaves me cold.

  23. Damn, Kwix, that’s going to leave a mark.

  24. “Really? Two out of three candidates choke out a risible Gas Tax pander. Guess the letter that belongs next to the one who made fun of them for it.”

    That would be the one who advocated raising capital gains taxes because it would be more “fair” even when it was pointed out to him that studies have shown that lower rates bring in more tax revenue.

  25. That WAS a lame answer.

    The correct answer is, “The brief spike in revenues after a capital gains tax cut, and the brief drop in revenues after an increase, are the result of people time-shifting transactions to take advantage of anticipated changes to the tax codes. Historical data shows that this phenomenon is brief, and that increases in the tax produces higher revenues and decreases produce lower revenues, as one would expect.”

    No the biggest fiscal policy wonk in the world, is he?

  26. No the correct answer is that “fairness” in paying for government provided goods and services is no different than it is for paying for private sector provided goods and services – on a user fee basis. Capital gains tax or other income tax rates have nothing to do with that.

    No one’s income from whatever source, salary, dividends, capital gains, etc. is a “service” that is being provided to them by the government.

    But your answer would also get an F because changes in tax revenue when capital gains rates are changed are not merely due to “time shifting” they are due to a change in the incentive to engage in capital investment activites.

  27. See, I was making a non-ideological statement about the reality that exists outside your head, and isn’t a matter of opinion. You know, the type of thing that can be said to be “correct.”

    As opposed to you, Gil, who are making a statement about your feelings/values/opinions, which really can’t be correct or incorrect.

    changes in tax revenue when capital gains rates are changed are not merely due to “time shifting” they are due to a change in the incentive to engage in capital investment activites. Certainly, this happens to a certain extent, but not enough to cause the Laughter Curve-degree of revenue changes necessary to cause actual declines in revenue over the long term. A 10% increase in the capital gains tax might not produce a 10% increase in revenue, but it most certainly does not produce a revenue loss.

  28. “when he was a big (and convincing!) budget hawk and debt-payer-downer”

    Did you actually say that? Convincing? Really? REALLY??????

    Wow. I can’t think of anything more succinct to suggest that any kind of real libertarian thought process at reason is long dead. Convincing? That word, in relationship to McTorture, or any politician, should never, ever be uttered.

    I can honestly I have never heard a convincing argument from a living politico in my adult life. Except maybe when Goldwater realized what the religious right was about to do to the republican party.

    Convincing? Really now.

    All I can say is I’m really, really sorry to hear about your early onset Alzheimer’s.

  29. “You know, the type of thing that can be said to be “correct.”

    Really.

    Do you have any actual proof that this statement is correct?

    “Historical data shows that this phenomenon is brief, and that increases in the tax produces higher revenues and decreases produce lower revenues, as one would expect.”

  30. Yup.

    There are some great analyses of the issue if you google “capital gains tax rates revenues,” including a debunking by Greg Mankiw.

  31. “Yup.”

    Translation: No.

  32. “Whole thing, with plenty more details, here. I might also add that trillion-dollar wars tend to be expensive, as do plans to boost the standing military by 150,000 troops, etc.”

    Ayn Randian:
    Cue the Paultards talking about how reason is full of pro-war neocons in 3…2…1…

    CO:Hey Matt Welch, Talldave, Ayn Randian and I are getting tired of this biased peacenik propaganda…if you are going to be fair and balanced you should at least get Michael Young to offset this horrible shilling.

  33. I can’t believe how selfish Matt Welch is…oh you want your trillion dollars back; quit whining maggot, if it weren’t for me you’d be talking gook right now.

  34. I might also add that trillion-dollar wars tend to be expensive,

    They’re a bargain if they prevent 2-trillion-dollar terrorist events.

    Whichever party isn’t in charge will bitch about the deficits. We know the formula for fiscal responsibility: a Republican congress that refuses to let a Dem President spend money (remember when they shut down the government over the budget fight? good times). Dem President + Dem Congress = massive tax hikes on top of massive deficit spending. GOP Congress + GOP President = tax cuts and massive deficit spending. GOP President + Dem Congress = more spending.

    Sometimes I wonder how this would all look if the GOP hadn’t been one vote short on the Balanced Budget Amendment. My guess is about the same, but with more loopholes and hypocrisy.

  35. A 10% increase in the capital gains tax might not produce a 10% increase in revenue, but it most certainly does not produce a revenue loss.

    Yes, it certainly does at some points of the curve. That’s why it curves downward at high rates. This has been known since the 1300s.

    http://en.wikipedia.org/wiki/Laffer_curve

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