So here’s Larry Kudlow:
It’s really a political issue. What will McCain and Romney do? They both want to expand the defense budget and the size of the military, as they should, to strengthen our national security in the War on Terror. But this, of course, costs money. Big money. President Reagan argued successfully in the 1980s that low tax rates reignite economic growth — growth that was absolutely essential to generate the resources necessary for a strong national-security posture.
Will McCain and Romney adopt the Reagan approach, or will they see higher tax rates as a tradeoff to a stronger military à la Eisenhower?
Cato’s Alan Reynolds worries that Sen. McCain will adopt an Ike-like policy, favoring high tax rates in order to fund a strong defense. Reagan’s view was completely different. In the battle for the heart and soul of the Republican party now happening on the campaign trail, will Ike win? Or will the Gipper?
If I understand it correctly, what he is asking can be translated as follows:
Will McCain or Romney pay for increased military spending by raising taxes, or will they wisely pay for increased military spending by cutting taxes?
This is what passes for a fiscal conservative these days. He’s like a dietitian telling you to compensate for your lack of exercise by increasing your consumption of cake.