Taxes And Deficits Can ( And Will ) Rise Simultaneously

http://www.huffingtonpost.com/james-kwak/budget-sense-and-nonsense_b_445197.html

Kwak: "but complaining about "more taxes" and "more deficits" in the same sentence? Does Paul Ryan not know how a deficit is measured, or does he not know where government revenues come from? Logically speaking, it must be one or the other."

Not exactly. Taxes are finite and spending borrowed money can be infinite ( as long as the Fed exists and can find buyers for our debt )- so it is very possible for taxes and deficits to increase simultaneously. Even if the government taxed 100% of everyone's earnings, the government could still create deficits by adding new borrowing to expand the budget.

Kwak: "The 2001 and 2003 Bush tax cuts and the unfunded Medicare prescription drug benefit created the large deficits of the Bush era."

Not really. The tax cuts had much less of an impact on the deficits than did the war spending and the spending on the post 9/11 police state. In fact, tax revenues as a share of GDP hardly changed at all from 2001-2008, even with the tax rate changes. The money poured into Afghanistan and Iraq swelled the deficits, not reduced tax revenues.