Tag: deficits

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The Republican’s Strategy

Okay. Does anyone need to have it explained to them again what the Republican strategy is?

When Bush took office ten years ago amid “controversy” over whether his tax plan would create a deficit (with the liberals foolishly believing that the Republicans were sincere about wanting a balanced budget), I argued that it was actually clearly the intent of the Republicans to create as big a deficit as possible because it serves their policy wishes.

  • firstly, it gloriously appears to justify cutting expenditures on programs that benefit the average American
  • secondly, it seems to prove that governments can’t be trusted to spend wisely (even though it’s usually the Republican government that can’t balance the budget)
  • thirdly, it creates the kind of noise Republicans need to try to generate mass hysteria about some kind of “crisis” that requires draconian measures to deal with.

They did it with Reagan (who raised the deficit from 45 billion to 450 billion) and they did it with Bush (who took a surplus and turned it into a deficit in only one year) and they will do it again next year with Palin or Gingrich or whomever.

Don’t believe me? How many Republicans made it a campaign issue when Bush ran up the deficit within less than a year of taking office after Clinton left a surplus?

But the whole strategy is rarely as naked as it is in Wisconsin where Governor Walker took a budget that was virtually balanced, handed out huge tax cuts to corporations, proclaimed a crisis when the cuts put the budget in deficit, and then, after refusing the offers of the public sector unions to rescind some of their own wages and benefits, attacked their right to collective bargaining.

It’s absolutely naked: there is a war, in the U.S., of the rich upon the poor. And you watch and you wonder, in amazement, that the poor, believing some insane illusion about justice and prosperity, refuse to fight back. Why the hell should the public sector employees have rescinded their own wages and benefits so that Wisconsin corporations could get a larger tax break?

Why is no one asking stockholders and profitable corporations to make some sacrifices because times are tough and the nation has to pull together and we are at war and so on?

Corporate share of federal taxes in the 1950’s: 30%

Corporate share of federal taxes in 2009: 6.6%

What the hell’s going on here: 30% of General Electric’s massive income comes from…. lending.

GE is a bank.

And here we are again– how rich America goes after the wealth of working America. They found out there was no way around paying people to work, so they evolved ways of reabsorbing that wealth through interest rates, hidden fees, tricked out mortgages, and shifting the tax burden.

The war on Iraq mattered because of the oil. It’s an achievement to not only persuade Americans to fight an entire war to sustain your investments, but also to pay a disproportionate cost of it by borrowing the money, running the federal budget into a deficit, and cutting taxes on the rich.

Now think about that– what sector of the economy gives you the warm fuzzies about productivity and employment and enduring prosperity: manufacturing.

What GE used to be known for.

What sector of the economy makes you think about scumbags, liars, and cheats: that’s right– banking.

GE is a bank.

 

I’ll bet you think I’m kidding when I tell you that the American tax system is so twisted that it actually transfers wealth from the working classes to the rich– here’s more detail on that. General Electric, one of the most profitable corporations in American history, pays no taxes at all. In fact, the U.S. government appears to “owe” GE about $4 billion.

This is the result of various strategies. When Republicans talk about reducing the tax burden for Americans, they deliberately identify the beneficiary as “Americans” when, in fact, I doubt they have proposed a single policy in the past 30 years that benefits average working Americans. It’s code, and the corporations and the rich know understand it. As when they propose to cut the budget, partly, by laying off tax collectors. The message is, we’ll make it less likely that you’ll get caught cheating on your taxes.

GE smartly hired people from the IRS to work for them, and to lobby the government on their behalf.

America– I’m sorry if you feel bad because I think you have the dumbest voters on the planet, but think about the fact that the people you elected are asking you to make serious sacrifices for the good of the nation, because times are tough, while simultaneously reducing the tax burden on those most able to pay is mind-blowing.

You are suckers.

Is GE embarrassed at all by this? Why, in America, should they be?

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The Dog Must be Walked; War Must be Paid For

Why oh why oh why did the Democrats not demand that the Republicans pay for their wars out of current tax revenues?

Would Americans have voted for a war that was going to cost each of them, man, woman, and child, $750 (over $2000 per household) so far? Or would they have demanded better proof, at least, of the actual existence of weapons of mass destruction?

The Republicans cut taxes while taking on the war and then borrowed to cover the deficit. Why did the Democrats allow the Republicans to bill the war to future generations? Did they not realize that once Bush had run up the deficit, the Republicans, having whipped the nation into a patriotic frenzy (with, among other things, those nauseating “God Bless America” interludes at ball games), could now use the deficit as an excuse to slash spending on programs that actually benefit most Americans?

Was this planned?

David Stockton appeared on “60 Minutes” last Sunday. The former Reagan budget director actually advocated higher taxes on the rich for the simple common sense reason that the country’s bills need to be paid.

One could be forgiven with coming away with the impression that there is indeed a class war going on in the U.S.: the rich are out to destroy the middle class.

Common sense: whether you were in favor or opposed to the Iraq War, it defies belief that the Republicans were able to get away with cutting taxes at a time when it was clear that the government needed additional revenues to defend itself against terrorism. Who benefits the most from the peace and security of the U.S.? The rich. So who pays the least to defend the peace and security of the U.S.? Proportionately, the rich.

By borrowing the money for his wars (and that is absolutely what he did), and then cutting taxes to the rich, George Bush stunningly shifted the burden of the cost of the wars to the middle-classes. The next step in the process is for the Republicans to scream bloody murder about the awful deficit they created and weep crocodile tears: “now we’ll have to cut Social Security and Medicare and other social programs! Alas!”

The Democrat’s biggest blunder? By allowing themselves to be cornered into supporting the war and terrified of being accused of raising taxes, the Democrats consented to screwing themselves. They should have demanded that Bush raise the revenue to pay for the war without borrowing! That would have been a Rove-like tactic that might have brilliantly positioned themselves as the more fiscally responsible party in 2010.

Instead, they are like the adults whose kids promised they would walk the dog every day, if they would only, please, please, please, get a dog. And now the Republicans sit on their fat asses watching “American Idol” on TV, ignoring the dog.

And now, well, the dog must be walked. And it’s raining, and it’s cold, and it’s dark. And the dog must be walked.

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Republican Deficits

Some critics of the George W. Bush Jr. tax cut don’t understand one simple but important thing about Republican economics. They allege that this $1.2 trillion tax cut, which primarily benefits the very rich, will drive the government back into a deficit within ten years. They think that Bush Jr. and his cronies don’t know this.

They know it very well. The cronies know it, absolutely. Bush Jr. himself may only be dimly aware of it, because he really isn’t all that bright.

The purpose of the tax cut is to accomplish exactly what the critics say it will: restore the budget to a deficit position. Why? Because the budget deficit was quite simply the best tool the conservatives had for transferring as much wealth from the poor to the rich as possible. Jimmy Carter left the presidency with most social programs intact and a relatively modest $45 billion deficit. President Reagan, unable politically to slash the social programs he wanted to slash, simply ran up the deficit by cutting taxes without cutting spending. He was the most fiscally irresponsible president in the history of the United States and left, as his legacy to the nation, a $450 billion deficit.

Mr. Do-Nothing Senior, George Bush, did nothing. The deficit suited Republicans just fine. Military spending continued at its usual hysterical pace, squandered left, right, and centre on madcap schemes, over-priced hammers, obsolete aircraft, and bizarre futuristic technologies that never worked. But even George Bush Sr. realized that he couldn’t let the deficit spiral too far out of control: he raised taxes. That is why, some think, he lost the next election to Bill Clinton.

Enter President Clinton. Clinton cut spending and left most existing taxes intact. Within five years, he had eliminated the annual deficit. The economy, spurred by low interest rates (caused by the fact that the government was no longer competing as heartily for loaned money), grew spectacularly.

The Republicans lost the election to Al Gore, but were awarded the Oval Office by the Republican appointees on the Supreme Court. Bush’s first significant act is to set the government on the path towards deficits again. His trillion dollar tax cut, combined with the downturn in the economy, (which will lower projected tax revenues) will almost guarantee that the government will once again be in a deficit position within ten years.

And then, once again, the Republicans will raise a hue and cry: we must cut spending!

Is it really all that subtle?

As you will know when you read this, all of the predictions here came true: Trump entered office January 2017 and by January 2018 the projected annual deficit of the United States will be about 4 times the size of Obama’s largest deficit (it was declining, slowly, before Trump).

[2018-05-08]