Letter to the Editor

Business Week, January 2005

Sent 30 Dec 2004, published in 24 Jan 05 issue "How the GOP called the Dems' bluff"

Dear Editor,

Robert Kuttner laments (in his 12/27/04-1/3/05 column) the decline of the GOP deficit hawks, many of whom have come to believe that "deficits don't matter." Kuttner says "different GOP factions ... [cite] opposite and incompatible reasons" for this belief: the supply-siders because we can grow the economy out of debt; the "starve-the-beast" advocates (e.g. Grover Norquist) because high debt will eventually precipitate a crisis and force needed spending cuts. Kuttner claims "both things can't be true" and blasts the GOP for inconsistency. But here he's wrong. For decades, Democrats relied on GOP deficit hawks to clean up their messes, happy to take credit for the spending while blaming those sour Republicans for insisting on higher taxes. The GOP finally got wise to this game and, under Reagan, called the Dems' bluff. Here's the new deal, they said to Dems; we're cutting taxes. If you keep spending at reasonable levels, we'll grow our way out of deficit and debt. If not, the coming crisis will force spending cuts. Either way, taxes AND spending are coming down. No inconsistency there, just a hard choice for Democrats!

Steven P. Sawyer