Economics

Feed the Beast

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Having blown to smithereens his late-campaign promise to enact a "net spending cut," President Barack Obama appears set to pulverize an already-undermined vow he repeated as recently as his first presidential speech to Congress: "If your family earns less than $250,000 a year, you will not see your taxes increased a single dime. I repeat: not one single dime."

The administration this weekend fanned out its economic heavy hitters on the TV chat shows to float a trial balloon: maybe we'll see some of those new taxes after all.

Treasury Secretary Timothy Geithner and National Economic Council Director Larry Summers both sidestepped questions on Obama's intentions about taxes. Geithner said the White House was not ready to rule out a tax hike to lower the federal deficit; Summers said Obama's proposed health care overhaul needs funding from somewhere.

"There is a lot that can happen over time," Summers said, adding that the administration believes "it is never a good idea to absolutely rule things out, no matter what." […]

"If we want an economy that's going to grow in the future, people have to understand we have to bring those deficits down. And it's going to be difficult, hard for us to do. And the path to that is through health care reform," Geithner said. "We're not at the point yet where we're going to make a judgment about what it's going to take."

So yes, even while the Smart Set tells us that state-budget cutbacks are ruinous during a time of recession (typically without mentioning the good-times spending binge that got us there), the big spenders in Washington are softening the ground for tax hikes…during a recession!

It's shocking that the president has brazenly disregarded his campaign and even presidential promises to not be the kind of tax-and-spend liberal of conservative caricature, but it's not surprising. As Reason repeatedly pointed out in 2008, both Obama and the Democrats writ large came to the cusp of reclaiming Washington by rejecting '90s-style "New Democrat" economic Clintonism. And Obama's double-talk at this point should be no surprise.