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Taxes, Spending, and Britain

Max Boot, what passes for an intelligent conservative op-ed writer, offers some advice to the Tories:

Much of the Tories' trouble is due to the skill with which Blair has seized the political center. He has run a tough, pro-American foreign policy while not interfering with a domestic economy that has produced 13 years of growth. Yet there are still issues on which he could be vulnerable, even if the Tories stay away from the "third rail" of British politics, the National Health Service.

The first of these is taxes. Although the Labor government has kept top income tax rates where they were after the Thatcher cuts of the 1980s, it has presided over dozens of stealth tax increases. The share of the economy taken by government has edged up from 35% in 1997 to a projected 42% today. (In the U.S., it's 29%.) The Tories should be promising big tax relief, as Ronald Reagan and George W. Bush did. Instead they're offering a paltry $7.5 billion in cuts, just 0.6% of the budget. . . .

Admittedly the Tories have some credibility problems in all these areas because of the disastrous John Major government, which took Britain further into the EU, raised taxes and cut the defense budget. But Major has been out of office since 1997 — long enough for the Tories to have recovered. The reason they haven't is that they've been focused more on political posturing than on principled policies. As Bruce Anderson writes in the Spectator, Britain's leading conservative magazine: "For the past seven weeks, the Tories have been suffering the consequences of seven years' timidity."

He thinks the Conservatives ought to propose large tax cuts, large increases in defense spending, and promise not to cut the U.K.'s largest domestic program, the National Health Service. Most astoundingly, this mathematically illiterate advice is explicitly contrasted with "political posturing" and put forward instead as a "principled" alternative. That should give you a sense of the ridiculously poor quality of substantive policy thought on the contemporary American right -- this crowd wouldn't know serious thinking if it smacked them in the face.

The other takeaway point is the sheer irrationality of the tax cut jihad. Britain, as anyone paying attention to today's election will know, and as Boot even manages to concede, has had very strong economic growth during the Blair years despite having significantly higher levels of taxation than the United States. Nevertheless, conservatives insist that further tax cuts are necessary to make the American economy succeed and that the Tories do poorly by not slavishly imitating the nonsensical policies of their pals across the Atlantic. The real lesson should be precisely the reverse -- if over the next several decades we fully-fund Social Security's promises, extend health care coverage to all Americans, recommit to investments in public infrastructure, maintain a strong miltiary, and provide some more liberal goodies taxes will need to go up. They'll need to go up quite a bit. And the economy will be -- just like the British economy -- just fine even if we do it.

May 5, 2005 | Permalink

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Matthew Yglesias looks into the abyss and shudders as he realizes that, as far as America's right is concerned, Max Boot is about as good as it gets--and that's none too good: Matthew Yglesias: Taxes, Spending, and Britain: Max Boot, what passes for an... [Read More]

Tracked on May 7, 2005 7:34:08 PM

Comments

The claim that Blair has not intefered with the domestic economy makes the UK sound like a laissez faire paradise.

Posted by: washerdreyer | May 5, 2005 2:56:56 PM

Or a laissez faire hellhole...

Posted by: bobo brooks | May 5, 2005 3:13:03 PM

There's a certain amount of pundit's fallacy going on here. Blair's "tough, pro-American foreign policy" is a liability, not an asset. Cutting the defense budget is a problem only in so far as it leads to a sentimental backlash as regiments get merged, not because high defence spending is seen as an inherent good (who is Britain really threatened by?). Only in the case of taxes is there no pundit's fallacy -- the evidence from the Thatcher years is that voters will say they want better-funded public services and then turn round and vote for the party with the tax-cutting rhetoric.

While I'm nitpicking: The "13 years of growth" started under the "disastrous" John Major government. Thatcher took Britain deeper into Europe too -- the Single European Act of 1987 was what really started European integration. Plus, everything you said.

Posted by: william | May 5, 2005 3:18:42 PM

Pundit fallacy in spades.

His point about "vote Blair get Brown" being a Tory slogan is just wrong. Brown is much more popular than Blair. Has he actually read anything about the election?

What this strikes me as is reverse-Naderism. ie - what the Conservatives need to do is offer a "real choice" by becoming more right wing and then voters will vote for them. Not mentioning that two (by American standards) left of center parties are going to garner about 2/3 of the national vote today. Yeah, keep trying that strategy and keep getting the results the conservatives are getting. That guy is living in fantasy land.

Posted by: Ben P | May 5, 2005 3:29:47 PM

He thinks the Conservatives ought to propose large tax cuts, large increases in defense spending, and promise not to cut the U.K.'s largest domestic program, the National Health Service.

In short, as you note, he's proposing that the Conservatives become the current Republican Party. Which is enjoying smashing electoral success in this country precisely because of dishonesty about their fiscal irresponsibility. So, other than the fact that "principled" to Mr. Boot means "lying about the consequences," this could be considered good advice. Or do you think that the British electorate would be sufficiently less gullible than the American electorate?

Posted by: mds | May 5, 2005 3:33:43 PM

In the US the dems could probably make gains by running right on some issues - a sort of cranky lou dobbs anti-immigrant economic populism. Likewise the Tories could run left on a few key issues, but both are unlikely

(note, I don't want the democrats to be a cranky lou dobbs anti-immigrant economic populist party, but it probably would get some votes)

Posted by: Atrios | May 5, 2005 3:38:05 PM

I think I know what Boot has done: he read one article in the Spectator and is trying to extrapolate from it about 20 years of British political history. I mean the guy makes a number of blatant factual errors about current British politics that shows he hasn't been following the campaign, doesn't understand British society, and hasn't read any polling data.

To put that it American terms, that would be me writing a column for the Guardian about the Democratic Party's role in American politics and what it should do by reading a column in the nation by Barbara Ehrenreich.

Posted by: Ben P | May 5, 2005 3:38:45 PM

I do think it's possible that openly making a mathematical impossibility the chief centerpiece of domestic policy is a political success in the US only because of a unique combination of circumstances, yes. (Including, but not limited to, the gullibility of part of the electorate.) I don't see any reasons to believe that these circumstances are replicable elsewehre.

Posted by: Matt Austern | May 5, 2005 3:39:52 PM

pOwned.

Posted by: praktike | May 5, 2005 3:44:18 PM

I'm not an expert on UK fiscal policy but I do know that neither Reagan nor Bush43 reduced government spending - so any claim that they cut taxes ignores the massive increases in deferred taxes. Other than this incredibly stupid comment, Max wrote a pretty decent op-ed.

Posted by: pgl | May 5, 2005 4:03:35 PM

"Other than this incredibly stupid comment, Max wrote a pretty decent op-ed." Umm? In what way?

Posted by: Ben P | May 5, 2005 4:05:11 PM

From what I've heard, the PM gets questions from the press which are unthinkable in the US. So it's reasonable that the gullibility of UK voters is less than that of US voters.

Posted by: Barry | May 5, 2005 4:08:44 PM

"this mathematically illiterate advice"

It works here, politically. Getting power is all that matters to these folks, the country be damned.

Posted by: Al Gore | May 5, 2005 4:39:43 PM

"taxes will need to go up. They'll need to go up quite a bit."

Why? We rack up $1.3 million in new debt every minute here, and everyone keeps whistling past the graveyard. Thinking that the Repukes will get their comeuppance is simply wishful thinking -- the kind of thinking we need to get past, IMO.

Posted by: Al Gore | May 5, 2005 4:42:01 PM

"His point about "vote Blair get Brown" being a Tory slogan is just wrong. Brown is much more popular than Blair. Has he actually read anything about the election?"

Um -- duh? These people don't need facts! They just scream the same thing in any and every context.

Shit, not only do they not need facts -- they've found out they can just MAKE SHIT UP and no one will call them on it. See this:

http://tinyurl.com/7dqr7

(half-way through) for the latest example.

Posted by: Al Gore | May 5, 2005 4:49:08 PM

I particularly like the way he starts by crediting Blair with not interfering with the economy (itself a lie, but I'll let that go), then calls Major's government a disaster. It was, of course, Major's government that bequeathed the economy to Blair. Make your mind up Max.

Posted by: Ginger Yellow | May 5, 2005 5:39:28 PM

"'Other than this incredibly stupid comment, Max wrote a pretty decent op-ed.' Umm? In what way?"

In the same way that Mrs. Lincoln had a wonderful time at the theater, apart from that one little incident . . .

Posted by: rea | May 5, 2005 5:41:22 PM

I wonder where American conservatives would be if they couldn't race bait or go on about Jesus. British conservatives were promising to improve police and health care. Do any of them long for principled arguments involving welfare queens, Willie Hortons, or Gavin Newsomes?

Posted by: Saam Barrager | May 5, 2005 9:10:34 PM

On the other hand, the Tories' entire campaign was built around whipping up anti-immigrant fears/hatred. Whereas Dubya in 2004 tried to pander to the Hispanic vote with his amnesty idea.

Posted by: Ginger Yellow | May 6, 2005 12:02:28 AM

Republicans just like big deficits. Bush Junior- $2 Trillion and counting, Reagan $1.8 Trillion, GHW Bush $1.6 Trillion (HaHa Junior beat Daddy). Clinton only ran up $1.4 Trillion and all of that went to paying the mortgage bills of Reagan and Bush. All the other presidents, from Washington to Carter ran up only $1 Trillion.

As Bigtime GOP VP Cheney says, "Deficits don't matter."

Posted by: bakho | May 6, 2005 12:08:28 AM

Matt, a suggestion for a future post.

Do you think that excessive regulation does more harm to an economy than excessive taxation? It seems that Chirac and Schroeder are putting a lot more effort into relaxing regulation than cutting taxes, and Blair and Clinton also governed as pro-business types with less emphasis on cutting taxes.

Posted by: Adam Herman | May 6, 2005 12:25:14 AM

Much of the Tories' trouble is due to the skill with which Blair has seized the political center.

Um, no. Much of the Tories trouble is that they don't have a coherent message or program.

That was much of Kerry's problem in the last American presidential election.

Apparently it does help to have a coherent message.

Posted by: raj | May 6, 2005 9:10:42 AM

Boot: Much of the Tories' trouble is due to the skill with which Blair has seized the political center.

Yeah, it sounds a lot like what the Republicans have done to the Dems, doesn't it? Note that Bush's policies haven't exactly been conservative, and Matt himself hinted that he was a RINO.

In reality, I don't think there's a whole lot you can do in a two-party system once the party in power has seized the center.

Posted by: fling93 | May 6, 2005 3:00:35 PM

" The share of the economy taken by government has edged up from 35% in 1997 to a projected 42% today. (In the U.S., it's 29%.)"
Anyone else think he is quoting government expenditute for UK and tax income for U.S.?

Total General Government Revenue as % of GDP 2002:
UK - 39.4 USA - 32.6

Total General Government Expenditure as % of GDP 2002
UK - 40.7 USA - 35.7

Taxation 2001
UK - 37.4 USA - 28.9

Source OECD in Figures, http://www.oecd.org/document/62/0,2340,en_2649_201185_2345918_1_1_1_1,00.html

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