Matt Yglesias ridicules Grover Norquist
According to the Norquistian theology, a good small-government conservative can’t agree to close a tax loophole that’s bad public policy in order to entice Democrats into agreeing to spending cuts. You can’t achieve efficiency enhancing reforms to the tax code by using the prospect of enhanced revenue as a sweetener, and you can’t broaden the coalition for spending cuts by using enhanced revenue as a sweetener. So the tax code stays inefficient and the spending level stays high, all so the members of the True Faith can be unsullied in the purity of their complaints about the inefficiency of the tax code and the high level of spending.
I think Grover’s plan makes more sense than Matt is giving him credit for. The idea is not to reform the government, its to bankrupt it. Once that is done spending reductions will come mechanically.
To wit Grover doesn’t ask candidates to sign a spending pledge. He asks them to sign a tax pledge. If you keep pushing for revenue decreasing measures and fight tooth and nail against revenue increasing measures then you create a situation where revenue – at least as a fraction of the economy – is trending down. Indeed, Grover’s basic plan has been incredibly successful in this regard.
Here are real federal tax receipts per person since 1955.
You can see that what was uneven but persistent growth up until 2000 has essentially stopped. In the first quarter of 2000 the federal government took in an annualized $4250 per person (in 1982 dollars). Only the first and second quarters of 2007 exceeded that when the government took in $4300 and $4266 per person.
Here is another way to look at the same thing. I had to Excel this unfortunately because Fred won’t (yet) let me compare years within the same series.
Look at what has happened since 2000. The trend as been ever more downward, going even into the negative for the last 4 years or so.
If one could continue this trend it would eventually drive government revenues to nothing. This I believe is Grover’s stated goal and he appears to be achieving it.
Now, in the long run I don’t think this is going to work because it cuts against demographic and ethnic trends. Minority are growing as a fraction of the population and there is a strengthening multiethnic social fabric. That force will push for expansions in the welfare state and the taxes to pay for it.
That being said, however, it wouldn’t make sense for Grover to take these trends lying down and a persistent strategy to bankrupt the government seems logical.
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Monday ~ June 6th, 2011 at 9:37 pm
Khal Mojo
Religion. It spring forth from anywhere there is fear and a will to use it for personal gain. This is an example of one of those wellsprings, and Norquist is the pope.
Monday ~ June 6th, 2011 at 11:37 pm
Curt Doolittle
“The idea is not to reform the government, its to bankrupt it. Once that is done spending reductions will come mechanically.”
Exactly.
While I remember this kind of dialog taking place as early as the seventies, and I certainly remember it during the Reagan administration, I don’t actually know how to trace the history of the “Either they bankrupt the country with socialism or we bankrupt the country resisting them” strategy.
Does anyone know where that conversation started?
Tuesday ~ June 7th, 2011 at 12:01 am
Lord
I am not sure even that is the case. This is the rights view of stimulus, larger and larger deficits eventually forcing the Fed to liquify it really boosting the economy. Deficits as anti spending and anti taxing.
Tuesday ~ June 7th, 2011 at 2:03 am
Real per capita growth in government revenue over the preceding ten-year period — Marginal Revolution
[...] From Karl Smith, here is a discussion. [...]
Tuesday ~ June 7th, 2011 at 9:42 am
Ryan
Shouldn’t there be one more zero in your first calculation?
Tuesday ~ June 7th, 2011 at 9:49 am
bdbd
You are correct, sir!
Tuesday ~ June 7th, 2011 at 10:12 am
Ryan
Ah, my mistake…I was taking it one number at a time, but dividing by the population is correcting the revenue number….
Tuesday ~ June 7th, 2011 at 10:56 am
TC
Governments like the U.S. cannot go bankrupt. They can have inflation, but they cannot go broke.
http://traderscrucible.com/2011/03/29/solvency-and-value-insolvency-and-debasement/
Grover is impoverishing our citizens.
Tuesday ~ June 7th, 2011 at 11:59 am
Why the Budget Ceiling Fight is good news to the Traders Crucible « The Traders Crucible
[...] of this are huge – it changes the entire debate. For example – Grover Norquist is currently a very powerful person. But as it becomes widely recognized that Grover Norquist believes in unicorns, he will become [...]
Tuesday ~ June 7th, 2011 at 2:04 pm
Peak Grover Norquist? « The Traders Crucible
[...] is something from my last post that I want to expand a bit. For example – Grover Norquist is currently a very powerful person. But as it becomes widely recognized that Grover Norquist believes in unicorns, he will become [...]
Tuesday ~ June 7th, 2011 at 3:24 pm
Kevin Dick
The graph ignores state and local government revenues. If you add up revenues from all governments, there is essentially nothing to see.
I’ve produced the equivalent charts for all levels of government here at http://emergentfool.com/2011/06/07/dont-forget-the-state-budgets/
Tuesday ~ June 7th, 2011 at 8:33 pm
Steve Roth
Fascinating to see what each of the steep drops led to:
1981
1985
1990
2001
2009
Four out of five!
You’re right. He’s brilliant. He’s successfully destroying the American government…by destroying America.
Tuesday ~ June 7th, 2011 at 9:00 pm
Sebastian H
Since the real per capita government growth appears to have been around 15-20% for most of that series, and since real per capita GDP growth has never been consistently anything like that, didn’t your series HAVE to come down much closer toward 0?
Wednesday ~ June 8th, 2011 at 5:05 am
MP
I guess “[driving] government revenues to nothing” is in the eye of the beholder. Looks more to me like a story of relentless growth in real revenue per taxpayer that may just have been reined in. Maybe. The recent flatness follows an acceleration in the 90′s, and that 2007 peak looks like it was back to long-run trend (though maybe a log plot would change that impression slightly).
Not saying that government is growing out of control or anything, as the economy has grown quite a bit too, but if the beast starting to feel starved, it’s at least as much about its insatiable appetite as about any lack of feeding.
Thursday ~ June 9th, 2011 at 9:59 am
Chris
Funny, the graph of real federal tax receipts per person since 1955 looks a lot like the graph of the S&P 500 since 1955. I’d guess that weatlh patterns, not tax policy, is what’s driving the graph.
Sunday ~ June 19th, 2011 at 2:56 am
Joe Eagar
Excuse me? Ethnic homogeneity seems to end in larger welfare states, not the other way around. Just look at Europe. Besides, the “white race” is mostly a southern myth; there’s incredible ethnic diversity amongst European-descended whites. This diversity, in my view, explains the smaller welfare state.
The answer isn’t less diversity, of course. It’s to increase the efficiency of the welfare state. The way left radicals keeps blocking center-right welfare-state proposals doesn’t help. There are plenty of center-right nations with market-based healthcare and efficient education systems, you know. The left needs to understand it cannot oppose all center-right ideas for social progress and expect our society to hold together. We’re a center-right nation. You can have social progress–but it has to be from a center-right point of view.
Just look at the Netherlands, or the Swiss.
Sunday ~ June 19th, 2011 at 3:18 am
Joe Eagar
Ah. I feel stupid. I forgot the new health care law. It does have it’s radical lefty bits, but the main structure is center-right. Well, if we can reform unemployment insurance, adult education, remove marriage penalties from tradition welfare (or even better, de-federalize it and replace with either block grants or a “fiscal equalization” scheme) we’d be set.
Of course, the left does whine that “the health care law wasn’t lefty enough! Obama betrayed us! It doesn’t matter that it covers everyone and expands Medicaid! We want to conquer and destroy our cultural enemies!!!” (ok, I might have thrown the last bit in out of hyperbole).
Friday ~ September 23rd, 2011 at 2:33 pm
Don’t Forget the State Budgets! « Occasional Insight
[...] a pet peeve and perhaps a mild obsession. Today, I saw that Tyler Cowen replicated a graph from a post by Karl Smith, a professor at UNC. The claim is that government tax revenues aren’t growing as fast as [...]
Monday ~ September 26th, 2011 at 6:32 pm
Don’t Forget the State Budgets! « Possible Insight
[...] a pet peeve and perhaps a mild obsession. Today, I saw that Tyler Cowen replicated a graph from a post by Karl Smith, a professor at UNC. The claim is that government tax revenues aren’t growing as fast as [...]