Wednesday, October 29, 2014

Trickle down a myth to justify tax cuts

by Tom Maertens, Mankato Free Press, 10/29/14

The Wall Street Journal editorial board lamented recently that the Republican Party doesn’t have a platform going into the mid-term elections.

But they do have a platform.

They oppose the Ex-Im Bank; they also:
--Oppose Medicare and Medicaid;
--Oppose Social Security;
--Oppose abortion;
--Oppose birth control (see the Blunt amendment);
--Oppose voting rights, for non-white people anyway;
--Oppose the Affordable Care Act;
--Oppose the Common Core;
--Oppose the teaching of evolution;
--Oppose food stamps;
--Oppose unemployment compensation;
--Oppose same sex marriage;
--Oppose environmental rules and action on global warming;
--Oppose the United Nations; and
--Oppose anything they can label communism, socialism, or progressive.

Their program also includes general fear-mongering about ISIS, Ebola and immigrants by people such as Karl Rove and Bobby Jindal, hoping that voters will somehow blame Democrats.

Where Congressional Republicans are unsurpassed is at obstructionism. As of mid-September the 113th Congress had passed only 165 bills that became law, although they found time to “repeal” Obamacare more than 50 times. The “do-nothing” Congress of 1947-1948, in contrast, passed 906 pieces of legislation.

As Brent Budowsky commented in The Hill, “Republicans promise they will continue to hate President Obama with a fanatical passion and politics of total gridlock. They promise to continue investigating Benghazi forever. They pledge to loathe Lois Lerner, vow to defeat the minimum wage and promise to prevent pay equity for women. … They vow to arrest Hispanic Dreamers and send them back where they belong. They promise to prove that climate change does not exist and to destroy ObamaCare.”

What Republicans favor are tax cuts for the wealthy: tax cuts in good times and tax cuts in bad times, because they believe that, in some land far, far away, tax cuts once paid for themselves.

They firmly believe that Ronald Reagan’s tax cuts brought prosperity, ignoring his Keynesianism stimulus ­— a huge military spending program. Reagan subsequently increased taxes 11 times, mostly on the middle class, to cover a sea of red ink, although he retained the tax cuts for the wealthy. Despite those tax increases, his policies tripled the national debt.

Bush Junior also believed in the Tax Fairy, and cut taxes while fighting two wars, resulting in even greater deficits. He left behind a major recession, a $1.2 trillion budget deficit, and a fiscal imbalance that guaranteed more deficits.

While the federal government can finance such deficits — at a cost — that doesn’t work for states that try “supply side economics” because they don’t have their own currencies. Thus, states that get into fiscal trouble have to resort to gimmicks, such as Tim Pawlenty used to conceal a $6 billion dollar deficit: accounting shifts, advanced payments on taxes, delaying bill payments and pushing spending down to local governments. Pawlenty raided the tobacco settlement fund, the K-12 education fund, and the Healthcare Access Fund for low-income families, and then claimed he left the state a surplus. A 2010 report from the National Conference of State Legislatures showed that Minnesota used one-time budget tricks to close 41 percent of its spending gap during Pawlenty’s last year in office.

Chris Christie has also tried the magical tax-cutting formula. The resulting damage to the state’s finances led to New Jersey’s credit rating being lowered eight times, according to Bloomberg last month.

Kansas governor Sam Brownback also invoked the Tax Fairy, which resulted in state budget shortfalls of 11 percent of revenue, according to the nonpartisan Kansas Legislative Research Department. As a result, Kansas’ credit rating has been downgraded three times.

That’s because trickle down is a myth, dreamed up to justify tax cuts for the wealthy. The International Monetary Fund recently released a study showing that redistribution of income from the affluent to the poor, contrary to conservatives’ claims, actually seems to increase economic growth.

The reality is that the US economy has grown for 55 straight months, the longest uninterrupted job growth in our history, and the budget deficit is at 2.8 percent of GDP and falling, the lowest level since 2007. We are working our way out of a deep hole, no thanks to “voodoo economics.”

Tom Maertens served as National Security Council director for nonproliferation and homeland defense under presidents Bill Clinton and George W. Bush, and as deputy coordinator for counterterrorism in the State Department during and after 9/11.


Blogger Minnesota Central said...

How do you know that Republicans do not support the Ex-Im bank ? The Senate version was led by Kirk and Blunt while 41 House Republicans sent a letter asking for it to be renewed. It was extended as part of the "keep the government funding while we go on campaign recess" ... and I suspect that more Republicans would support it if they had to take a direct vote on the bill (just as they had to do before.)

These Republicans are the GOP --- Gridlock Obstructionists Powerful -- representing the business interests that want the Ex-Im to continue to be funded.

9:06 AM  
Anonymous Anonymous said...

Trickle down is a religion, and therefore immune to mere facts and complaints from sciency smarty pants type people.

However, it doesn't do any harm to point this out to the Trickledowners. They deserve all the mockery that can be heaped upon them.

3:28 PM  

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