Norquist responded that Americans don’t want higher taxes and tried to argue that lawmakers can make-up for the lost revenue and still fund social programs and other government priorities with the “economic growth” that results from cutting tax rates. But Zarakai didn’t buy it. Pointing out that growth declined after President George W. Bush’s massive tax cuts and increased after President Bill Clinton raised them, he told Norquist, “This is a wish, not a plan”:
ZAKARIA: Are you telling me that you believe you can get all, you can close that gap entirely by cutting spending, that is by taking something on the range of 7% or 8% of GDP out of government spending? That is cutting $800 billion out of government spending every year?
NORQUIST: You do two things. You reduce spending, and you have stronger economic growth. This is one of the weakest recoveries we’ve had –
ZAKARIA: You can as a practical matter, this is a wish, not a plan. I would like stronger economic growth, too….This is all rhetoric, Grover. You’ve got a plan as a practical matter. As I said, Clinton raised taxes, he got growth. Bush had the biggest tax cuts in a generation, and he got the weakest growth in 30 years. All I’m saying is as a matter of practical planning for the fiscal future of the United States your answer can’t be, well we’ll have stronger growth. Yeah, if we grow at 6%, we don’t need to do anything. Everything is solvent, right? But I can’t wish for that. We’ve got to plan realistically.
Norquist ignored Zakaria and called on Congress to reduce the capital gains tax, corporate and individual rates, insisting that the policies will lead to the kind of economic growth that will off-set lost revenue. “All of the things I’m talking about, that you suggest is rhetoric, that’s not rhetoric, that’s the plan,” he explained.
But economic data just doesn’t back up Norquist’s claims. Analyzing data from the last three decades, the Center for American Progress’ Michael Ettlinger and Michael Linden found that investment, productivity, employment, and overall economic growth wereall stronger during the 1990s, when America took a decade-long hiatus from supply-side economics, than they were in the 1980s and 2000s: