President Reagan’s former Office of Management and Budget Director, David Stockman, recently wrote:
IF there were such a thing as Chapter 11 for politicians, the Republican push to extend the unaffordable Bush tax cuts would amount to a bankruptcy filing. The nation’s public debt — if honestly reckoned to include municipal bonds and the $7 trillion of new deficits baked into the cake through 2015 — will soon reach $18 trillion. That’s a Greece-scale 120 percent of gross domestic product, and fairly screams out for austerity and sacrifice. It is therefore unseemly for the Senate minority leader, Mitch McConnell, to insist that the nation’s wealthiest taxpayers be spared even a three-percentage-point rate increase.
Now note– this is one of REAGAN’s Top People!! And even he has an issue with the modern GOP/”Conservative” Party!!
Because– this makes no sense. How could GOP’ers, who demand so stridently that budgets be balanced, & ie. “no passing down debts to our grandchildren”, absolutely INSIST that the Bush Tax Cuts for the Wealthy– ie, for families making $250k and above– be maintained… without campaigning for any corresponding CUT in Government Spending? In fact, for any Democrat proposal, the GOP always demands cuts… which are correspondingly always on the ‘Social Services’ side… (which includes “special interests” such as Police and Teachers, btw), but NEVER on the ‘Defense Spending’ side, which is by far & away the biggest chunk of the budget, -&- the biggest sector of Budgetary Growth in the past 10years…
Well– here’s an explanation by Martin Wolf, the Chief Economics commentator of the Financial Times (a very CONSERVATIVE publication, btw… or at least what passes for “Conservative” in Britain): “The political genius of supply-side economics“:
To understand modern Republican thinking on fiscal policy, we need to go back to perhaps the most politically brilliant (albeit economically unconvincing) idea in the history of fiscal policy: “supply-side economics” [ie, also called "Trickle-Down" Theory, or "Voodoo Economics"]. Supply-side economics liberated conservatives from any need to insist on fiscal rectitude and balanced budgets. Supply-side economics said that one could cut taxes and balance budgets, because incentive effects would generate new activity and so higher revenue.
How did supply-side economics bring these benefits? First, it allowed conservatives to ignore deficits [cf. Cheney, "Reagan proved, deficits don't matter"]. They could argue that, whatever the impact of the tax cuts in the short run, they would bring the budget back into balance, in the longer run. Second, the theory gave an economic justification – the argument from incentives – for lowering taxes on politically important supporters. Finally, if deficits did not, in fact, disappear, conservatives could fall back on the “starve the beast” theory: deficits would create a fiscal crisis that would force the government to cut spending and even destroy the hated welfare state.
True, the theory that cuts would pay for themselves has proved altogether wrong. That this might well be the case was evident: cutting tax rates from, say, 30 per cent to zero would unambiguously reduce revenue to zero. This is not to argue there were no incentive effects. But they were not large enough to offset the fiscal impact of the cuts (see, on this, Wikipedia and a nice chart from Paul Krugman).
Indeed, Greg Mankiw, no less, chairman of the Council of Economic Advisers under George W. Bush, has responded to the view that broad-based tax cuts would pay for themselves, as follows: “I did not find such a claim credible, based on the available evidence. I never have, and I still don’t.”
So– Chief Economists under both Reagan -and- Bush W. say, basically, DEFICITS DO MATTER.
But Who is listening?
Do we really think the broken Senate is going to make a difference? Even with 60 votes, every single piece of significant legislation is either ignored (350+ House Bills simply discarded in latest Congress Session), or Filibustered (most Filibusters ever recorded in history, latest Congress Session)… Details here.
And do we really think Obama is going to make a difference? I mean, I can understand most Campaign Promises are hyperbolic, but really- why so many Issues -&- People ‘thrown under a bus’?! Perhaps Obama was simply ‘center-right’ &/or Corporatist all along…? or more likely, he’s simply a Situational Conformist:
What Obama does by his nature is find the middle ground. As an excellent innate politician, he will find the political center of any field and rush to it. That’s where elections are won – the center. So, that’s why he sounded so progressive during the primaries, because that was the center of the left. And why he sounded like such a reformer during the general election because the great majority of Americans desperately wanted change.
Right now, Obama perceives the center of the country to be somewhere between Dick Cheney and Harry Reid. Do you know where that leaves him? Joe Lieberman. That’s why we’re in the sorry shape we’re in now.
Maybe we should just giggle, & watch Colbert’s version of “Trickle Down”…