Donald Luskin Discovers That AARP Does Lobbying

In his tirade against the AARP, Donald Luskin displays his incredible stupidity all over again. But let me start where we might have common ground:

In 2003, political support from the AARP was essential in the narrow passage of the vast and costly expansion of Medicare to include a prescription-drug benefit.

Luskin’s main theme is that the AARP’s call for greater entitlement spending will raise your taxes. He’s right. But it’s odd that he forgot to add that George W. Bush pushed so hard for an overly bloated and inefficient (unless you are a Big Pharma lobbyist) prescription-drug benefit that he lied to Congress about its cost. The President is also bragging about giving these benefits to seniors in the same speeches where he lies about cutting your taxes. But here is where Mr. Luskin turns to either stupidity or mendacity. He is claiming that the tax rate cuts increased tax revenues. How does he make this claim?

According to the AARP, it is meaningless that federal tax revenues are already at an all-time high in dollar terms. The paper claims that revenues “are still below their long-run average, and substantially below where they need to be.” Actually, at an estimated 18.5 percent of GDP in 2007, revenues are above – not below – the 18 percent average of the last 50 years. They’ve only been higher than today in 6 of the last 20 years, and 9 of the last 50.

Well, let’s graph the total Federal revenue to GDP ratio from 1957 to 2006. Sure there were periods when this ratio was less than 18.5%. After all, Luskin has included: (a) the second Eisenhower term where we did have a small government including a much smaller Social Security program; (b) the Reagan-Bush41 years where we ran massive deficits (aka taxes including deferred taxation where higher than current taxes); and (c) recession years. Notice that in every year from 1994 to 2001, the ratio of total Federal revenue to GDP exceeded his 18.5%.

Our graph goes onto to report Federal revenues not including payroll contributions (NIPC). We do so because we have had a sizeable increase in payroll contributions to fund the increases in Social Security benefits enacted over the past half century. When Luskin claims that the Federal deficit has declined since 2004, he fails to admit that the fall in the unified deficit came not from a fall in the General Fund deficit but from a rise in the Trust Fund surpluses. If he wants to debate the AARP over the Social Security issue, this kind of rightwing mendacity undercuts any credibility he may have ever had (OK – Luskin never has had an ounce of credibility on anything). But notice something about NIPC relative to GDP. An 11% NIPC to GDP ratio is lower than almost any year outside of the Reagan-Bush41 years of rapidly rising deficits. I wonder if Luskin actually knows this, but he’s just hoping those that read the National Review are too stupid to realize how dishonest his attack on the AARP really is.