Yesterday we published "The Fiscal Cliff – Don't Jump!" making the case that pro-growth tax and spending policies – not tax increases – were needed to solve the immense budgetary challenges facing the nation. To make sure no one missed the point, the word "growth" was used nineteen times in our essay.
Further, as we explained, "the largest driver of the budget deficit has been lost revenue due to economic stagnation."
The editors at the Wall Street Journal made the same case. "The reality is that the fastest way to raise revenue is with faster economic growth," they wrote in their house editorial. Following is the WSJ's table of the fiscal "ugly facts" and some key excerpts from the editorial.
"The feds rolled up another $1.1 trillion deficit for the year that ended September 30, which was the biggest deficit since World War II, except for each of the previous three years. President Obama can now proudly claim the four largest deficits in modern history. As a share of GDP, the deficit fell to 7% last year, which was still above any single year of the Reagan Presidency, or any other year since Truman worked in the Oval Office."
"Tax revenue kept climbing, up 6.4% for the year overall, and at $2.45 trillion it is now close to the historic high it reached in fiscal 2007 before the recession hit. Mr. Obama won't want you to know this, but this revenue increase is occurring under the Bush tax rates that he so desperately wants to raise in the name of getting what he says is merely 'a little more in taxes.' Individual income tax payments are now up $233 billion over the last two years, or 26%."
"This healthy revenue increase comes despite measly economic growth of between 1% and 2%. Imagine the gusher of revenue the feds could get if government got out of the way and let the economy grow faster.""Now let's look at outlays, which declined a bit in 2012. That small miracle was achieved thanks to a 4% fall in defense spending, a 24% fall in jobless benefits, and an 8.9% decline in Medicaid spending."
"Note, however, that federal spending remains at a new plateau of about $3.54 trillion, or some $800 billion more than the last pre-recession year of 2007. One way to think about this is that most of the $830 billion stimulus of 2009 has now become part of the federal budget baseline. The 'emergency' spending of the stimulus has now become permanent, as we predicted it would."
"When Beltway politicians claim they want a 'balanced' approach to reducing the deficit, what they really mean is raising taxes to finance this new higher spending level. And the still-higher level that is coming with ObamaCare."