Bloomberg on the Federal Budget
Mayor Bloomberg has an op-ed piece in the Wall Street Journal about the federal budget. It manages to be both wonderful and wrong at the same time. First, the wonderful part:
Then, the wrong part:
It's an overstatement for Mr. Bloomberg to say that "the federal government was running up huge deficits during a period of economic growth." Two New York Sun editorials, Incredible Shrinking Deficit and Incredible Shrinking Deficit, II tell the story. Here, from the second of those editorials, were the Congressional Budget Office's deficit numbers in mid-2007:
2004: $413 billion
And as a percentage of GDP:
And remember, these weren't only periods of economic growth, they were also wartime; it wasn't just tax cuts that ran up those deficits, it was all that extra September 11 rebuilding aid and homeland security funding for places like New York City that Mayor Bloomberg was shuttling to Washington at the time to ask for and happily spending once he got. I don't recall a lot of whinging from him at the time about the federal deficit. As for the belief that the economy will respond to deficit reduction, it depends what's in the plan. One that emphasizes increases in marginal tax rates won't do much, as George H.W. Bush and first-term Bill Clinton found. One that includes spending restraint and rate reductions that yield increased tax revenue (like the second-term Clinton capital gains tax cut, or the tariff reductions of NAFTA), will boost the economy.
I'm not quite sure how this piece, which is pretty critical of President Obama, fits with Mr. Bloomberg's vice presidential campaign, but then again, it also is pretty critical of the Republicans.
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