Why are Keynesians, of all people, calling for tax hikes in a crap economy?

Back in 2010, everyone agreed that if all the Bush rates expired, the feds would haul in about $3.9 trillion over a 10-year period. If only the rates on the $200,000-plus crowd expired, the extra amount would be around $700 billion over the decade, or around $70 billion a year. That’s a lot of money to everyone but the federal government, which spends close to $4 trillion a year. Simply put, the push to change tax rates on the wealthy isn’t about revenue, or about getting the government on anything approaching sound fiscal footing.

Rather, it’s largely a symbolic gesture that is political in nature and effect. That it goes against basic Keynesian theory yet is espoused by neo-Keynesians tells us more about them than it does about good ol’ J.M. Keynes.

That said, it’s time for the limited-government crowd to get its act together. The time for simply saying the answer to every problem is to reduce rates is at best half-right. The GOP – and many conservatives and libertarians – for too long refused to focus on the spending part of the equation. More than Democrats, the Republicans sanctified deficit spending, to the point that under Bush spending rose far faster than revenues did. And you just didn’t hear enough folks on the right complaining, because it was politically expedient for them not to. Libertarians were the ones playing Cassandra. And while liberals and conservatives like to blame libertarians for all the ills of the planet, they are the ones responsible for a federal government that is not simply an embarrassment of debt but a real impediment to economic growth.