From yesterday’s NYT:
Assuming the economy has begun to recover by 2010, next year would be the natural time to start raising taxes.
And their reason is because of the deficit:
Mr. Obama will have to face up to what he has so far avoided: the need to raise taxes broadly to rein in deficits. The deficits are not of his making. Some two-thirds of the $9 trillion shortfall resulted from policies that predate his administration; most of the rest is the cost of policies that both parties consider necessary, like continued relief from the alternative minimum tax.
Of course this is pretty disingenuous. Sure Bush era politics caused a significant amount of economic problems. And Clinton’s Bush-like housing policies for low-income families played into the economic issues. And the past several decades of Congressional support for Fannie and Freddie played into creating today’s mess. But just because Obama inherited an economic nightmare doesn’t mean that the natural course was to spend a ton of money.
The Obama administration could have taken a different approach with their economic policy. By choosing to support a stimulus package, and promote the Fed’s policies of rescuing Wall Street, the administration decided to join in the policies of previous administrations. By failing to trash the GSEs now and continuing to let them entangle the government in the housing industry, the administration has perpetuated policies that are driving deficits.
The administration could have come in slashing government programs. They could have come in attacking the out of control spending that has created deficit issues. They didn’t have to come in fueling helicopter Ben’s money dumping machine.