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One Reader's View Increased revenues offset by out-of-control spending

David Shuey

Posted: December 02, 2005

I must strongly disagree with a section of Robert Frank's essay "The income gap grows" (Currents, Nov. 27).

He states, "Although supply-side economists predicted that the [marginal tax rate] cuts would increase tax revenues by stimulating more than enough income growth to offset the lower rates, this did not happen, and hence the large budget deficits of the 1980s."

In fact that is exactly what happened.

From 1983-1989, revenues rose 65 percent from $601 billion in 1983 to more than $991 billion in 1989.

For the entire decade, this increase in revenues was 92 percent, almost doubling.

The deficits of the 1980s were clearly due to enormous increases in government spending. Contrary to popular opinion, only about a third of this increase was required to rebuild a military left fallow in the 1970s.

All this data is available through the Congressional Budget Office at cbo.gov.

Unfortunately, history is repeating itself, as often happens when economists, journalists and politicians fail to learn the lessons of the past. Once again federal revenues are up following the Bush tax cuts, but spending is simply out of control. Hence, deficits.

David Shuey

Berwyn

emqdjs@yahoo.com