...Aspiring fiscal conservatives ... might be interested in learning four tricks that American politicians commonly use when promising to cut taxes while simultaneously reducing budget deficits. ...
The first ... was coined by Reagan’s budget director, David Stockman..., because the numbers in the 1981 budget plan did not add up. “We invented the ‘magic asterisk,’” ... Ever since, the magic asterisk has become a familiar American device. ...
[Second,]... the conjurer ... resorts to the rosy scenario: since he cannot find enough tax loopholes to eliminate, he must claim that ... stronger economic growth will bring in the additional revenue. ..
Right on cue, it is time for the famous Laffer hypothesis – the proposition ... that reductions in tax rates ... so stimulate economic growth that total tax revenue ... goes up... One might think that the Romney campaign would not resurrect so discredited a trick. ...
The final trick, “starve the beast,” typically comes later, if and when the president has enacted his tax cuts and discovers ... tax revenues have not grown... The audience is now told that losing tax revenue and widening the budget deficit was the plan all along. The performer explains that the deficit is all the fault of congress for not cutting spending and that ... “Congress can’t spend money it doesn’t have.” This trick never works...
By the time the crowd realizes that it has been conned, the magician has already pulled off the greatest trick of all: yet another audience that came to see the deficit shrink leaves the theater with the deficit bigger than before.
Or, in the immortal words of Rocky Squirrel... "That trick never works!"
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