A few weeks ago, I attended a talk at the Tax Policy Center with McCain's economic advisor, Doug Holtz-Eakin. (See here for an earlier post on the talk.) The audio of the complete talk is on this page.
During the Q&A, one questioner asked "Does Senator McCain believe that tax cuts pay for themselves?" Holtz-Eakin responded "No."
I followed up by asking how he could reconcile this answer with the fact that McCain has on multiple occasions said that he subscribes to the Laffer hypothesis that cutting taxes increases revenues. For example, he told the National Review:
Tax cuts, starting with Kennedy, as we all know, increase revenues. So what’s the argument for increasing taxes? If you get the opposite effect out of tax cuts?The essence of Holtz-Eakin's response was that if you talk as much as McCain does, "you will occasionally cut corners and say things that are too blunt. That's all that's going on." You can listen to the audio clip here:
There you have it. When McCain says something that is untrue, he's just being "too blunt."
This is the economy policy version of McCain's repeated assertions that Iran is training al-Qaeda. The problem is not just that these claims are demonstrably false--it's that they are false and crucially important to policy. These very falsehoods could be used to justify government-bankrupting tax cuts and a war with Iran, which is exactly what we're likely to get if McCain is elected.
(I didn't have a chance to ask Holtz-Eakin why it is, if he thinks Laffer is full of it, that Laffer is a special adviser to McCain, as Jeff Frankels pointed out.)