Thursday, July 22, 2004

The right way to cut taxes

As done by the Big Dog of course.

The key to Clinton's success, says Alice Rivlin, a Brookings Institution scholar who served as his director of management and budget, was adhering to the "pay/go" agreement first forged by President George H. W. Bush and a Democratic Congress, whereby tax cuts or entitlement increases had to be funded on a current basis. She says Clinton raised taxes at just the right time — when incomes were starting to rise after years of stagnation — leading to a surge of receipts. The result was the smallest government in terms of its percentage of GDP since Johnson, and the first substantial budget surpluses since Harry S. Truman.

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