Tax cut voodoo...

Once more with feeling:  Current and projected deficits are primarily the result of Republican tax cut dogmas that they cling to like a religion and push on the public like patent medicine, even in the face of all evidence that they have failed as fiscal  policy. Returning to rational taxation by, as a first step, letting the Bush tax cuts expire is the best path to restoring balance in federal budgets.  More tax cuts, as proposed by the GOP in their budget proposals, are an utter fraud as "fiscal conservatism" and benefit no one but the economic elite.

From the Center on Budget and Policy Priorities:

Who needs Medicare?  We've got magic tax cuts!

Some lawmakers, pundits, and others continue to say that President George W. Bush’s policies did not drive the projected federal deficits of the coming decade — that, instead, it was the policies of President Obama and Congress in 2009 and 2010. But, the fact remains: the economic downturn, President Bush’s tax cuts and the wars in Afghanistan and Iraq explain virtually the entire deficit over the next ten years...

The deficit for fiscal year 2009 — which began more than three months before President Obama’s inauguration — was $1.4 trillion and, at 10 percent of Gross Domestic Product (GDP), the largest deficit relative to the economy since the end of World War II. At $1.3 trillion and nearly 9 percent of GDP, the deficit in 2010 was only slightly lower. If current policies remain in place, deficits will likely resemble those figures in 2011 and hover near $1 trillion a year for the next decade…

The key question is: where do we go from here? It’s too late to undo the damage caused by the tax cuts and wars over the last decade, which have left us with a large overhang of debt. (In fact, that debt legacy — and the resulting interest costs — are a key reason, along with an aging population and rising health-care costs, that it’s unrealistic and ill-advised to restrict total federal spending to the average outlay levels that prevailed over the 1970-2008 period, as some have proposed.) But it’s feasible to enact measures now — to take effect once the economy has recovered more fully — that would put the budget on a sustainable path without jeopardizing the economic recovery.

The most pressing need is to arrest the relentless rise in the ratio of federal debt to GDP. One simple way to make significant progress toward that goal would be to let the 2001 and 2003 tax cuts expire after 2012.

Congress should either let these tax cuts lapse when they are scheduled to expire — for everybody, not just for people with incomes over $200,000 for an individual or $250,000 for a couple — or pay for those portions it wishes to extend. (It would, in fact, be desirable to continue some elements of the tax cuts, while offsetting their cost.) The economy should have recovered sufficiently by the end of 2012 to absorb the reduction in purchasing power. By that one simple step, Congress would put deficits and debt on a sustainable path for the next decade, as Figure 2 shows.

Of course, much more would need to be done to keep us on a sustainable course for decades after that; letting the Bush tax cuts lapse wouldn’t by itself solve our longer-term fiscal challenges. Congress will need to use findings from demonstrations, pilots, and research on cost containment conducted under the health reform law to take very strong steps to slow the growth of costs throughout the U.S. health care system, in the public and private sectors alike; these rising costs are the greatest threat to the nation’s fiscal future. Congress also ought to tackle fundamental tax reform to make the tax code simpler, fairer, and more economically efficient, while also raising more revenue….

Letting the Bush tax cuts lapse would stabilize the debt quickly and give policymakers time to get the rest of the job done right.