A Cuts Only Approach without Raising Revenue Doesn't Work

Paul Krugman published a piece today entitled The Texas Omen that demonstrates the failure of modern conservative theories about budgeting. The theory that never raising taxes under any circumstances and just cutting spending  can fix budget shortfalls and support economic recovery is not working.  Texas, the state where this has been implemented most consistently, is now facing one of the worst budget gaps in the country and its ability to educate and train its future workforce has been undermined.

The entire piece is worth a read but one important point is the need in many states, North Carolina included, for policymakers to be sound fiscal managers and recognize the structural problems in state revenue systems that need to be addressed.


  1. Jeff S

    January 7, 2011 at 8:52 pm

    You guys are pushing for tax increases hard today aren’t you?

    Maybe now is a good time to reflect on the policies that got us here in the first place. I would also like to hear people talking about more than the current year’s budget crisis. Let’s talk about the budget crisis of the next five years. It’s not going away, and could very well get worse. Is it possible to plan ahead, or is it political suicide to speak the truth to your constituents?

  2. Ian

    January 8, 2011 at 12:15 am

    “You guys are pushing for tax increases hard today aren’t you?

    Maybe now is a good time to reflect on the policies that got us here in the first place.”

    You mean the 15 years or so of tax cuts at every election cycle? Not saying that high tax rates are good, but if they are the bane of the economy we should be thriving atm

  3. Alex

    January 8, 2011 at 6:40 am

    I think the answer for the budget crisis is a very hefty tax on all Progressives who yearn for the Eisenhower days when there was virtually no limit on income taxes. They call it “Modernization of Revenue ” but I say for these folks who hate to cut spending, let’s sock it to them- maybe even 50% of their salaries and cancel all of their deductions.

  4. […] This post was mentioned on Twitter by Rebecca Sugrue. Rebecca Sugrue said: A Cuts Only Approach without Raising Revenue Doesn't Work: Paul Krugman published a piece today entitled The Tex… http://bit.ly/hrOrS1 […]

  5. jlp

    January 8, 2011 at 12:59 pm

    Even better still find a list of all state employees that voted the republicans into the general assembly and hand them their pink slip. After all this is what they voted for right? You can say alot about the republicans but you cannot say that they were not clear on their intentions. Just another case of “cut everything except what effects me” syndrome.

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