David Drier and the WSJ push supply side nonsense

Defending tax cuts the House passed yesterday, David Drier spouted the standard falsehood of supply-siders everywhere:

"By cutting taxes, you grow the economy, and you generate an enhanced flow of revenues to the Treasury," said Rep. David Dreier (R-Calif.), chairman of the House Rules Committee.

Revenue is not enhanced by tax cuts; it is reduced in almost all circumstances. Ask Bush's economists.

Meanwhile, the Wall Street Journal editorial page attributes most of the recovery to President Bush's 2003 tax cut, while trying to imply it increased revenue:

Oh, and yes, there was a $120 billion reduction in the budget deficit in 2005. That's because tax receipts rose by more than in any previous year in U.S. history, even adjusting for inflation. Receipts were up by $55 billion above projections in 2004; $122 billion above projections in 2005; and are already running well ahead of projections so far in fiscal 2006 (which began in October).

But again, the Journal is trying to mislead you. The fact that the legislation lost less revenue than projected is being used to (falsely) suggest that it actually increased revenue.

I've said it before and I'll say it again -- never trust the WSJ editorial page.

Update 12/8: Via Brad DeLong, Daniel Gross has more on problems with the WSJ editorial.

Update 12/9: Via reader DJ Ninja in comments, here's Rep. Jeb Hensarling pushing the same supply-side nonsense:

"Clearly, tax relief is part of the deficit solution, not part of the problem," said Representative Jeb Hensarling, Republican of Texas and one of the mavericks. "More economic growth and more jobs means more tax revenue flowing into the federal Treasury. Tax revenues are up close to 15 percent, the highest level in U.S. history, and the budget deficit has shrunk by more than $100 billion."

Comments

[DJ Ninja]

Everyone's confused! Jeb Hensarling (R-TX) is quoted in today's NYT as saying, "Clearly, tax relief is part of the deficit solution, not part of the problem."

[Taxman]

Actually, spending is the problem. Both parties are drunk with spending our hard-earned money. There are only about 10 spending hawks in the entire Congress. I guess there is no cut in government growth in the next generation. We can only hope for cuts in the rate of government growth. And there isn't much hope in even that.