Higher taxes now, spending cuts later. That was the “balanced approach” President Obama and the Democrats tried to force Republicans to accept last August. While Speaker John Boehner, R-Ohio, wanted to make the deal, House conservatives forced him to say ‘no.’ They knew from President Reagan’s experience in the 1980s that the tax hikes would come (sure as death), but the spending cuts never would.
The exact same story has been playing out in Europe. For months we’ve heard liberal commentators like The New York Times Paul Krugman and Clinton Labor Secretary Robert Reich decry Europe’s “austerity” programs. Yesterday, Krugman wrote, “claims that slashing government spending would somehow encourage consumers and businesses to spend more have been overwhelmingly refuted by the experience of the past two years. So spending cuts in a depressed economy just make the depression deeper.”
Problem is, Europe has not been cutting spending. Mercatus Center Senior Fellow Veronique de Rugy has crunched the numbers and found that among some of Europe’s worst economies (Spain, the United Kingdom, France, Greece, and Italy) government spending cuts have wither been tiny or non-existent. Greece and Spain did cut slightly in 2009 through 2011, but both countries are still spending more today than they were in 2008. Italy did reduce spending in 2009 and 2010, but increased spending in 2011. Meanwhile France and the United Kingdom have yet to cut spending at all.
The most important point to keep in mind is that whenever cuts took place, they were always overwhelmed by large counterproductive tax increases. Unfortunately, that point is often overlooked. This approach to austerity — some spending cuts with large tax increases — is what President Obama has called the “balanced approach.”
Indeed, The Washington Post reports that Obama’s message to France in the wake of their last election has been, “more spending and looser monetary policy would help promote recovery in the short term and could be reined in later.” Complete silence from Obama on the new French government’s plans to raise taxes on the rich to 75 percent.
Obama’s plan for the United States is identical to the new Socialist government’s plan for France: higher spending and taxes now, spending cuts later. Republicans should offer Americans a different path this November.
Wisconsin: Milwaukee Mayor Tom Barrett is expected to win today’s Democratic primary for the right o face Gov. Scott Walker in June 8ths recall election. Democrats had planned a post-primary “Unity Rally” tonight, but that had been canceled.
Indiana: Sen. Richard Lugar’s last television ad accuses his opponent Treasurer Richard Mourdock of wanting to “cut every single senior’s Social Security.” Lugar would become just the second six-term senator ever to lose a primary.
Super PACs: Billionaire investor George Soros plans to donate $1 million to super PAC American Bridge 21st Century, a pro-Democratic outside group that is helping Mr. Obama and fellow Democrats, and another million to America Votes, an organization run by Democrats that helps to coordinate the grassroots activities of progressive groups around the country.
Obama: During a visit to a university science complex in Albany today, Obama will outline a five-point “to do” list for lawmakers that packages job creation and mortgage relief ideas he has proposed before.
Romney: Defending his auto bailout position Monday, Romney told a Cleveland television station, “I’ll take a lot of credit for the fact that this industry’s come back.” “My own view is that the auto companies needed to go through bankruptcy before government help,” Romney said. “And frankly, that’s finally what the president did. He finally took them through bankruptcy.” And in an email to supporters, Rick Santorum endorsed Romney: “Above all else, we both agree that President Obama must be defeated. The task will not be easy. It will require all hands on deck if our nominee is to be victorious. Gov. Romney will be that nominee and he has my endorsement and support to win this the most critical election of our lifetime.”
Around the Bigs
The Washington Post, Al-Qaeda airline bomb plot disrupted: The CIA and overseas intelligence partners disrupted an al-Qaeda plot to blow up civilian aircraft using an advanced explosive device designed by the terrorist network’s affiliate in Yemen, U.S. officials said Monday.
The Washington Post, Maryland man kidnapped in Pakistan, pleads for his life in video: Warren Weinstein, a 70-year-old American aid expert kidnapped in Pakistan last summer, has appeared in a video asking President Obama to save his life by meeting his al-Qaeda captors’ demands to free convicted terrorists imprisoned in the United States.
The Wall Street Journal, Child Immigration Is Rising: South Texas is seeing a rise in children from Central America who have slipped across the border unaccompanied into the U.S. from Mexico after that country began deporting fewer kids who arrived without visas.
The Wall Street Journal, House Bill Shields Defense From Cuts: House Budget Committee Chairman Paul Ryan, R-Wis., has developed a bill that would prevent defense-spending cuts at the end of the year by rolling back portions of the 2010 health-care law and the Dodd-Frank financial overhaul.
The Wall Street Journal, U.S. Poised to Approve Drilling Plan: U.S. officials are expected Tuesday to approve a plan by Anadarko Petroleum to drill 3,700 natural-gas wells in eastern Utah. Once Anadarko’s wells are up and running, they would be expected to produce about one billion cubic feet of natural gas a day.
The New York Times, Political Tumult in Greece After Uncertain Elections: Just a day after coming in a weak first in its worst showing ever in national elections, the center-right New Democracy party quickly announced on Monday that it had failed to form a governing majority.
At Real Clear Politics, Sean Trende argues that Romney’s path to the White House is not that narrow.
The Tax Foundation reports that Americans are now paying more in taxes than for food, clothing, and shelter.
Human Events John Gizzi reports from France on the election of the new socialist government: “Like Obama, Socialist Hollande is sure to generate fervent opposition because of a decidedly big-spending, tax-hiking, and statist agenda that he made no secret of in the campaign.”
Talking Points Memo Reports that pressure is building for Obama to hurry up and evolve on gay marriage.
The Washington Post‘s Chris Cillizza reports on why Obama hasn’t evolved yet.
The Democratic Party of Wisconsin canceled its post-primary “Unity Rally” for tonight and Daily Kos reports it is because the front runner in the primary, Milwaukee Mayor Tom Barrett, “does not want to be seen in the company of union leaders and union members.”