New Ideas?

Check out this excerpt from Bruce Bartlett's post about President Obama's budget at forbes.com.

Republicans will undoubtedly make extravagant claims about the detrimental economic effect of these higher taxes. When one hears these claims, however, it is worth remembering that they said the same things in years past and none of their dire predictions came to pass.

According to a recent Treasury Department study, Ronald Reagan proposed the largest peacetime tax increase in American history as part of a budget deal to get the federal deficit under control. The Tax Equity and Fiscal Responsibility Act (TEFRA) of 1982 was signed into law on Sept. 3, and most of its provisions took effect on Jan. 1, 1983.

During debate on TEFRA, many conservatives predicted economic disaster. They argued that raising taxes in the midst of a severe recession was exactly the wrong thing to do. "Every school child knows you don't raise taxes in a recession unless you want to make it worse," The Wall Street Journal's editorial page warned. Said Rep. Newt Gingrich, "I think it will make the economy sicker." The Chamber of Commerce of the U.S. said it had "no doubt that it will curb the economic recovery everyone wants."

Looking at the data, however, it is very hard to see any evidence that TEFRA had a negative effect on growth. Indeed, one could easily make a case that its enactment stimulated growth. As one can see, the economy's growth rates after TEFRA took effect were among the fastest in history.

My my, that all sounds so familiar. Didn't I hear those very same arguments recently from many Congressional Republicans? As a matter of fact isn't that the very same meme that Newt Gingrich is once again promoting all over again? Now after they get off their fainting couches having learned that President Reagan actually RAISED taxes the GOP needs to do some serious soul searching The Republicans need wake up to the fact that their "new" ideas can't continue to be repackaged old ideas. That is at least if they ever want to have a shot at being relevant again in the future.

(h/t Steve Benen)