Bruce Bartlett's new book gets an enthusiastic reception today in an economics column in the The New York Times that appears under the unintentionally accurate headline "Partisan Economics in Action." The Times column says that the Republican Party "continues to advocate tax cuts even though the recent Bush tax cuts led to only mediocre economic growth and huge deficits. (Numbers from the Congressional Budget Office show that Mr. Bush's policies are responsible for far more of the projected deficits than Mr. Obama's.)" It's not entirely clear whether these are Mr. Bartlett's views or those of the Times columnist or both, but it's just inaccurate to blame the Bush tax cuts for "huge deficits." As the Bush tax cuts took effect, the deficit shrank, to the point where in August 2007, the Congressional Budget was estimating a 2007 deficit of $158 billion, or 1.2% of GDP. It was only after the Democrats took over Congress in the 2006 election that the deficit started to soar again, as a New York Sun editorial, "A Democratic Deficit," explained. Even if one is to blame Mr. Bush's policies for deficits, many of the spending programs that contributed -- a ramp-up in federal education spending under the No Child Left Behind Act, prescription drug benefits for the elderly as part of Medicare, increases in homeland security spending and the war in Afghanistan after the terrorist attacks of September 11, 2001, the first "stimulus" bill and the TARP -- were passed with bipartisan support from Democrats in Congress. The Times column focuses on blaming the tax cuts, not the spending, for the deficits.
The Times article goes on: "For one thing, past tax increases have not choked off economic growth. The 1980s boom didn't immediately follow the 1981 Reagan tax cut; it followed his 1982 tax increase to reduce the deficit. The 1990s boom followed the 1993 Clinton tax increase." This is a fine example of the post hoc ergo propter hoc fallacy. But that game can be played by both sides; others (not the Times) point out that the 1990s boom really got going after the 1997 cut in the capital gains tax that followed the Republican takeover of Congress. To really understand the 1980s the best thing to do is probably to read Bob Bartley's book, but for here suffice it to say that the 1982 tax increase was small compared to the 1981 tax cut. If the Times is all of a sudden going to portray the Reagan presidency as a period of tax increases and deficit reduction, it's a rewriting of history that would have to cause the paper to go back and revise much of its coverage at the time and since then.