Supply Side Economics… Vindicated?

Fight disinformation: Sign up for the free Mother Jones Daily newsletter and follow the news that matters.


Some tedious budget stuff. Recently, the Congressional Budget Office released a report noting that, thanks to an unexpected revenue surge, the deficit wouldn’t be nearly as bad this year as last expected, or as bad as last year. Not surprisingly, Stephen Moore jumped all over this in the Wall Street Journal, arguing that the CBO’s numbers proved the Bush tax cuts “worked” and are boosting economic growth. Supply-side magic!

Fine theory, it’s just not true. The Center on Budget and Policy Priorities breaks down the increase in revenues. First, they are not due to higher-than-expected economic growth—which would have at least suggested that the Bush tax cuts are “boosting” the economy—since growth has not been unusually rapid or stronger than projected. Second, many of the factors that did cause the increase are temporary. About $50 billion of the increase came because of the expiration of a business tax cut—in other words, more revenues were raised because of a tax hike. Surprise, surprise. Most importantly, the recent revenue boost hasn’t come close to making up for the massive loss of revenue caused by all of the tax cuts since 2000, which is what needs to happen for “Reaganomics” to work. For more on this, see Angry Bear here and here.

Tax cuts do not pay for themselves. The deficit is much, much larger than it would be without the Bush tax cuts. In some ways, who cares? As James K. Galbraith argues in Mother Jones this month, deficits don’t seem to matter all that much. The last four years have certainly skewered the argument that deficits “crowd out” investment and kick up interest rates. More to the point, if Congress repealed all of the Bush tax cuts and spent the money on health, education, and public infrastructure instead, that would be perfectly fine by me. Borrowing money to invest in the future is how good corporations operate, and it’s a sound way for the country to operate. But we’re not doing that. And that’s a problem, because persistently high deficits mean that eventually borrowing costs will mushroom faster than the economy can grow, and fiscal Armageddon will descend upon us. It will come down to taxes versus letting retirees pick through garbage on the street, and seniors, I’m told, don’t much like garbage. The numbers are inexorable, and supply-side hand-waving doesn’t change the basic problems at hand.

WE CAME UP SHORT.

We just wrapped up a shorter-than-normal, urgent-as-ever fundraising drive and we came up about $45,000 short of our $300,000 goal.

That means we're going to have upwards of $350,000, maybe more, to raise in online donations between now and June 30, when our fiscal year ends and we have to get to break-even. And even though there's zero cushion to miss the mark, we won't be all that in your face about our fundraising again until June.

So we urgently need this specific ask, what you're reading right now, to start bringing in more donations than it ever has. The reality, for these next few months and next few years, is that we have to start finding ways to grow our online supporter base in a big way—and we're optimistic we can keep making real headway by being real with you about this.

Because the bottom line: Corporations and powerful people with deep pockets will never sustain the type of journalism Mother Jones exists to do. The only investors who won’t let independent, investigative journalism down are the people who actually care about its future—you.

And we hope you might consider pitching in before moving on to whatever it is you're about to do next. We really need to see if we'll be able to raise more with this real estate on a daily basis than we have been, so we're hoping to see a promising start.

payment methods

WE CAME UP SHORT.

We just wrapped up a shorter-than-normal, urgent-as-ever fundraising drive and we came up about $45,000 short of our $300,000 goal.

That means we're going to have upwards of $350,000, maybe more, to raise in online donations between now and June 30, when our fiscal year ends and we have to get to break-even. And even though there's zero cushion to miss the mark, we won't be all that in your face about our fundraising again until June.

So we urgently need this specific ask, what you're reading right now, to start bringing in more donations than it ever has. The reality, for these next few months and next few years, is that we have to start finding ways to grow our online supporter base in a big way—and we're optimistic we can keep making real headway by being real with you about this.

Because the bottom line: Corporations and powerful people with deep pockets will never sustain the type of journalism Mother Jones exists to do. The only investors who won’t let independent, investigative journalism down are the people who actually care about its future—you.

And we hope you might consider pitching in before moving on to whatever it is you're about to do next. We really need to see if we'll be able to raise more with this real estate on a daily basis than we have been, so we're hoping to see a promising start.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate