Saturday, October 8, 2011

The republicans admit to being half wrong... but wrong on the wrong half!

Although I may not sound like it, I was a Republican into my 50’s and a fiscal conservative my entire life.

I was raised with sayings such as “a penny saved is a penny earned”,
neither a borrower nor a lender be” and “God helps those who help themselves”. My parents were products of the Great Depression and tried to pass the lessons they learned on to their children. Thrift, hard work and a good education would allow us to live the American dream. They had three sons. Two became engineers, one with an Ivy League master’s degree, and the third, a lawyer (their only disappointment).

A fiscal conservative is one who believes that, like an individual, the government’s income and expenditures should be in balance. Borrowing for capital improvements that would serve at least as long as it took to satisfy the debt was acceptable, like buying a house or car is for an individual.

As long as we could afford it I also supported programs that would help people who were struggling to survive. These people had previously been supported through charity. Why shouldn’t all of us come together to provide them with help?

I thought that the Republicans agreed with me, but then Ronald Reagan was elected. He believed that he could reduce taxes and that would increase the governments income. This theory has come to be known as ”trickle down”, “supply side” and “Reaganomics”. I prefer the name given it by President George H W Bush, “VooDoo Economics”.

I was an economics major in undergraduate school and the idea that, by reducing income you could increase income, flew in the face of common sense and was contrary to everything I had learned about economics.

Let’s see how this “theory” worked in practice. When Reagan was sworn in a little over 30 years ago, our national debt was $994 billion. When he left office it had tripled to $2,867 billion. The national debt increased over his first term by 49% and by 40% during his second term.

While cutting taxes he also increased spending from $678 billion to $1,144 billion, almost double. Needless to say, Reagan had lost my vote long before the end of his first term.

During the middle of his second term I read “Triumph of Politics” by David Stockman who had served as Director of the Office of Management and the Budget during Reagan’s first term. He explained, rather patiently, that if you cut taxes you must also reduce expenditures or you’re going to end up with a tremendous increase in the amount you need to borrow.

In Reagan’s case he almost tripled America’s debt and doubled the government’s expenditures. Despite this he remains the darling of the Tea Party who say they want to make government smaller. I would appreciate it if someone, perhaps a member of the Tea Party, could explain this to me.

After that George H W Bush and Clinton vetoed bills that required expenditures that weren’t paid for, raised taxes, and by 2000 not only brought the budget into balance but created a surplus. Needless to say, this fiscal conservative was convinced and I have been a Democrat ever since.

George W Bush reinforced my decision. He practiced Reganomics, cutting taxes and increasing expenditures turning Clinton’s surplus into ever increasing deficits. In his eight years in office Bush increased spending from $1,821 billion to $3,107 billion He also managed to double the national debt increasing it from 5 trillion, 769 billion to 10 trillion 413 billion dollars.

During Clinton’s last term the debt decreased, for the first time since the 20’s, by 2%. During Bush’s first term the debt increased by 22% and in the second by18%.

I suspect that neither Reagan nor Bush really believed in supply side economics. What they did believe was that the best way to get reelected in greedy and irresponsible America was to cut taxes, while continuing to fund the Federal programs we love.

The Republicans now admit they were half wrong. They still want to cut taxes but now say they will reduce expenditures by eliminating all the programs that have been created to help the middle and lower class. The Tea Party which consists of middle class Americans thinks this is wonderful.

Have they lost their minds?

We can not hold Obama responsible for this economic mess. He took office in the middle of the deepest recession since the 30’s. Like Roosevelt he responded by saving the financial system and some of Americas biggest corporations ( Tarp) and by reducing taxes and pumping billions of dollars into the economy (the stimulus bill). These measures brought the recession to an end but have not solved the unemployment problem. Now he wants to continue tax decreases for the middle, class continue to pay unemployment insurance and invest money in America’s infrastructure. This time he wants to pay for these things by increasing taxes on people who make $1 million dollars or more.

The Republicans say they can support some of this.

Since they love cutting taxes they will support that part of it.

Since they are sworn to protect the fortunes of the rich they will oppose any tax increase on them.

Since they want any program to be paid for, they will take the money from the poor, the elderly or our children.

Incredible !!

1 comment:

  1. Ron, you see the repubs as they really are in todays world, a party that caters to the interests of business and the really wealthy at the expense of what is best for the country and the people as a whole. As an Independent who always tended toward the right of middle, I feel closer today to the Obama camp than the far right. By the way I see Obama as a Democrat who leans towards the middle as opposed to being the far lefty he is painted as by the far right. Thanks for your insight!