Consider this: When the appropriate time comes for a gradual troop withdrawal from Iraq, the voting public is far more likely to want a tough-on-defense president to negotiate the event. Go all the way back to the Korean War. Voters selected General Dwight D. Eisenhower to negotiate withdrawal, rather than the much more liberal Adlai Stevenson. Or recall that in 1968 voters chose the tough-minded Richard Nixon to manage a pullout from South Vietnam, rather than the fuzzy-thinking Hubert Humphrey.
Here’s another example of the ever-widening void that separates each party’s stable of candidates, and of the fact-versus-fiction choice that awaits voters in 2008: House and Senate Democrats are in the process of crafting a five-year budget resolution that leaves out investor tax-cut extensions for capital gains and dividends. They say they are trying to balance the budget and increase tax revenues. Yet the latest budget report unequivocally shows that these very same investor tax cuts have paid for themselves.
Non-withheld income taxes -- read cap-gains, dividends, and income from small owner-operated businesses -- hit a record high of $49 billion on April 24. So far this year, this tax-collection category has shot up 30 percent, while withheld income-tax collections at lower tax rates have jumped 17.5 percent.
In other words, the Laffer curve is working: lower tax rates lead to higher tax revenues through a growing economy and a larger income base. By removing pro-growth tax cuts, the Democratic budget will actually slow the economy, diminish revenue growth, and increase the out-year budget gap.
Ignoring all this, in addition to the reality of a 4.5 percent unemployment rate and Dow 13,000, is a Democratic triumph of liberal ideology over objective empirical analysis.
It’s also a recipe for Democratic disaster about a year and half from now.