Bush Never Cut Taxes

Recently there was much discussion on the extension of the Bush tax cuts. Republicans and Democrats were both giving President Bush credit for cutting taxes when president, and Republicans were accusing the Democrats and President Obama of trying to raise taxes.

Leaving aside the fact that the tax cuts were actually the result of hundreds of congressmen in addition to President Bush and giving him credit, and leaving aside the debate over whether the expiration of the tax cuts constitute a tax increase there is still one big problem with the whole debate. Under President Bush taxes never went down. President Bush never cut taxes.

That is because as any Austrian economist can tell you, Total Taxes are always equal to Total Spending. It is true that some taxes were cut under President Bush, but that only means that other taxes went up even more.

What confuses the average person is that Total Taxes is the sum of Direct Taxes and Indirect Taxes. Deficit spending is therefore considered a tax. It can be paid by higher interest rates as the government crowds out other borrowers, or it can be paid by inflation as the government taxes away the wealth of those who hold cash. In both cases value is being transferred from the private sector to the public sector, and that is a tax.

Taxes shot up under President Bush, which is why the Tea Party Movement started in late 2007. The Tea Party movement has always had government spending as a major focus.

Now the debate is coming up as to whether or not the debt ceiling will be raised. A portion of the Republican takeover of the House of Representatives was based on Tea Party support. If the Republicans raise the debt ceiling, that will be an increase in taxes, which will be a repudiation of the support that got them elected.

Tea Party Protest History

The first of the modern Tea Party protests took place in 2007. It was a combined event, both a protest against the excessive spending of George W. Bush and a campaign event of presidential candidate Ron Paul. Throughout 2008 more of these combined events occurred.

This is important to remember, because while the current state of the Tea Party movement is such to cause many libertarians and other freedom lovers to be a little cautious of the current Tea Party protests, especially those that emphasize the pseudo-patriotism of the current military misadventures in the Middle East, especially the Tea Party Express AstroTurf movement, the history is still noble.

Currently progressive and liberal critics of the Tea Party movement like to ask the question where the protesters were before February 2009. This is asked in order to demonstrate the hypocrisy of the protesters by highlighting how they didn’t protest spending under Bush. This allegedly shows that the protests aren’t based on spending but either on partisanship or on alleged (but never proven) racism.

It is true that after the election many people joined the movement who were not in it previously. It is true that many of these late-comers could have their concern described as partisan instead of fiscal, but certainly not all of them. The same can be said about the reduced attendance in anti-war protests since January 2009.

The history of the Tea Party protests is also forgotten by members of the Republican Party trying to absorb the Tea Party protests with false promises of “enemy of my enemy” and “lesser of two evils” who do not want to recall the true origin of the protests. To acknowledge where the protests came from is to acknowledge the dirty secret of Republican fiscal irresponsibility and to lose the audience they wish to capture.

History is inconvenient, and thus forgotten.

Secession, or Jettison

When Bush was president, there were some hopeful signs on the subject of secession. It was when Bush was president that the Free State Project was initiated, and it was under President Bush that liberal pundits made their first, tentative explorations into the subjects of nullification and secession, subjects previously forbidden to liberals and progressives. The tentative progressive explorations all came to an abrupt halt when Obama was elected, of course, at which point conservatives started making the same explorations with regards to health care, explorations that were forbidden due to the war on terror.

But secession is not the only way to deal with irreconcilable differences between different states and regions of the country. Although there has been no noticeable exploration of this option, it should be possible to jettison a state that is more of a burden to the union than the rest of the states wish to bear.

This option is actually being discussed in the much looser federation known as the European Union, as Germans are, on average, quite displeased with the bailout of the Greek Government. Some talk about Greece withdrawing from the EU, some talk about Germany withdrawing from the EU, and some talk about kicking Greece out of the EU.

That last option could be applied to great effect in the United States.

California, for example, is a state in such severe financial disarray that it is actually in worse shape than Greece. It is practically inevitable that at some point the federal government will have to come in and rescue California from its massive structural deficits, and will have to do so more than once. Is it right that other states should have to shoulder that burden simply because California politicians are unable to resist giving the public employee union anything they desire?

Texas, where talk of secession was so notable that it made the news, is in much better shape financially. They are causing a controversy because they are getting unabashedly political in their choice of textbooks, and their decisions have an impact on the rest of the country. People in smaller states are quite displeased that their own textbook choices will be limited by manufacturers trying to please politicians in Texas.

There is no precedent for ejecting a state from the union, so every single action taken would be groundbreaking. It is possible that one could argue that under Article Five it is forbidden to eject a state on the grounds that doing so would deprive them of representation in the Senate. It is possible, but that is a weak argument given that the article is supposed to ensure that no state that is in the union lacks proper representation. Any state that is jettisoned is no longer a state.

The benefits to jettison can be immense. There is no way currently for people in one state to reject noxious politicians elected by another state. If jettison were implemented on, for example, Arizona’s new immigration bill, the result would mean the United States is permanently relieved from having John McCain taint the Senate any more.