McClatchy writes States broke? Maybe they cut taxes too much. "The tax cuts were supposed to stimulate Ohio's economy and create jobs. But that never happened once the economy tanked. Instead, the changes ended up costing Ohio more than $2 billion a year in lost tax revenue; money that would go a long way toward closing the state's $8 billion budget gap for fiscal year 2012.
'At least half of our current budget problem is a direct result of the tax changes we made in 2005. A lot of people don't want to hear that, but that's the reality. Much of our pain is self-inflicted,' said Zach Schiller, research director at Policy Matters Ohio, a liberal government-research group in Cleveland.
Schiller's lament is by no means unique. Across the country, taxpayers jarred by cuts to government jobs and services are reassessing the risks and costs of a variety of tax reductions, exemptions and credits, and the ideology that drives them. States cut taxes in hopes of spurring economic growth, but in state after state, it hasn't worked."
Remember that deficit that ballooned under Reagan? Yeah, that's the point, that supply-side economics doesn't work. Sure you can argue that when they cut taxes they failed to cut spending an equal amount and that's why there's a deficit. But that's not what the right argued for. They said that if you cut taxes you increase revenue because the economy is supposed to grow with lower taxes so the new lower rates make up for the missing taxes. But time and time again, that doesn't happen. Now the libertarians are using the large deficits to say we can't afford the government and must cut the services. And yet, there was a federal surplus not too long ago, how did that happen again?
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