More Fear-Mongering Economic Lies At GOP Debate

by HumanOfEarth –

gop debate wisconsin

Every Republican in the G.O.P. race has the same idea about economics. Cut taxes, cut spending, cut regulation, and bam! —  prosperity will spread faster than you can believe. Leave companies alone, and everybody will prosper.

Slash taxes for the rich, let the private sector go unrefereed, that’s how the Republicans propose to save the middle class.

From the Washington Post transcript,

Donald Trump:

“We don’t win anymore. Our taxes are too high. I’ve come up with a tax plan that many, many people like very much. It’s going to be a tremendous plan. I think it’ll make our country and our economy very dynamic… Taxes too high, wages too high, we’re not going to be able to compete against the world. We just can’t do it.”

Ted Cruz:

“I have rolled out a bold and simple flat tax: 10 percent for every American that would produce booming growth… The second element is regulatory reform, pulling back the armies of regulators that have descended like locusts on small businesses…And the third element is sound money. Every time we’ve pursued all three of those — whether in the 1920s with Calvin Coolidge or the 1960s with JFK or the 1980s with Ronald Reagan — the result has been incredible economic growth.”

Marco Rubio:

“And we lose that competition because we have the highest business tax rate in the industrialized world, because we have regulations that continue to grow by the billions every single week, because we have a crazy health care law that discourages companies from hiring people…”

Ben Carson:

“Everybody should pay the same proportion of what they make. You make $10 billion, you pay a billion. You make $10, you pay $1… But you also have to get rid of all the deductions and all the loopholes… And you have to set the rate at an appropriate level… The fact of the matter is, I believe if you put more money in people’s pockets that they will actually be more generous rather than less generous.

Jeb Bush:

“A 4 percent growth strategy starts with tax reform… We… cut the rates down. A corporate rate of 20 percent… On the regulatory side I think we need to repeal every rule that Barack Obama has in terms of work in progress, every one of them.”

Carly Fiorina:

“We need to try the free market. The free market. Where people actually have to compete… We have to hack through this regulatory thicket, repeal so much.”

Rand Paul:

I want a government really, really small, so small you can barely see it. So I want lower taxes and much more money in the private sector.

De-regulate, de-tax, de-fang the government. This economic methodology is not new.

It was policy throughout the 1920s.

From Henry Blodget of Business Insider,

“The next year — 1925 — the tax cuts continued. The top rate was slashed to 25%, down from 73% just two years earlier. The highest wage earners — those who made $100,000 and up — got to keep a vastly larger share of their income than they had only a few years previously.”

From Wikipedia,

“[Calvin] Coolidge [,president from 1923-1929,] disdained regulation, and demonstrated this by appointing commissioners to the Federal Trade Commission and the Interstate Commerce Commission who did little to restrict the activities of businesses under their jurisdiction. The regulatory state under Coolidge was, as one biographer described it, ‘thin to the point of invisibility.’”

So how’d the economy react under the exact policies the Republicans are running on? What’d the economy do untethered from those evil “armies of regulators?” Were the rich really “more generous rather than less generous” with the flood of cash lining their coffers? Were those “1920s with Calvin Coolidge” as wonderful as they say?

Well, as Blodget continues,

“For a few years, from 1925-1929, the economy and stock market boomed. The decade became known as the ‘Roaring 20s.’”

The economy was soaring! Things were great!

For the few, that is. While the wealthy people got wealthier,

“Inequality — the difference in wealth between the top earners and everyone else — also soared to unprecedented levels.”

The Roaring ‘20s were not roaring for everyone. This was a time of poverty. The Great Depression began in the early ‘20s with huge numbers of people struggling because unions and organized labor lost their battles, and working class wages slowed, and discrimination endured, and the government stopped guaranteeing farmers solid wages for their goods — so farm families suffered, poor city people suffered, black people suffered, women suffered, immigrants suffered.

As Blodget continues,

“Then the bottom fell out… When you have super-low tax rates on rich people [you get] unsustainable sugar highs in the economy — brief, enjoyable booms followed by protracted busts. They also appear to be correlated with very high inequality. (For example, see the 1920s and now).”

Cutting taxes spurs growth, but that wealth goes to the top, and is accomplished by leaving millions of people in poverty. You must have millions of super poor and poor, middle-, and lower-class to have the super rich.

Eventually the bubble created by the rich and their gobs of cash will pop. It will bust.

And you have an event that will be remembered almost a century later as the Great Crash of 1929. And in response to this, in 1932, you had a wave of populism sweep the nation and propel a socialist Democrat by the name of Franklin D. Roosevelt into office.

That wave stayed high for the next thirty-six years, from 1932-1968 (FDR to Nixon), with Democrats in control of this nation’s government. During that time, there were no economic bubbles, no towering sugar highs in the economy, no massive economic busts.

We were voting politicians into office who would continue the FDR-era policies of a government for the people, by the people. Not for corporations, by corporations.

As Blodget reports,

“Contrary to what Republicans would have you believe, super-high tax rates on rich people do not appear to hurt the economy or make people lazy: During the 1950s and early 1960s, the top bracket income tax rate was over 90%–and the economy, middle-class, and stock market boomed.

Some of the most prosperous periods in US history (1950s and 1960s) have come during periods of super-high marginal income tax rates.  And some of the most disastrous periods in US history (1930s, 2010s) have come after periods of super-low income tax rates.

In the good periods, moreover, the middle-class boomed and inequality between the country’s highest earners and everyone else shrank. In the bad periods, meanwhile, inequality soared, and the richest 1% of the population came to earn a staggering amount of the country’s income.”

But as the conservatives took back control of the Senate and the White House (a fascinating NYT article on how religion played a part in this re-taking of power here), and made law the deep tax cuts for the rich/de-regulation of the economy central to Republican economic theory (Reaganomics), bubble after bubble popped up.

As Paul Krugman, renowned economist and Distinguished Professor of Economics at the Graduate Center of the City University of New York, outlines in the New York Times,

“The whole era since around 1985 has been one of successive bubbles. There was a huge commercial real estate bubble in the 80s, closely tied up with the S&L crisis; a bubble in capital flows to Asia in the mid 90s; the dotcom bubble; the housing bubble; and now, it seems, the BRIC bubble. There was nothing comparable in the 50s and 60s… So what was different? The answer seems obvious: financial deregulation, including capital account liberalization. Banks were set free — and went wild, again and again.”

And they use the same old ideology they did then to promote themselves. Cut taxes, cut regulation. You’ll drive business away. You’ll hurt yourselves. Don’t take money from us, or else we’ll leave. They’re bullies, and we can’t allow it. They’ve been saying it for years, against every push for equality this country has had.

As Bloomberg View reports,

“The Republican playbook on taxes… has been fairly consistent since the early 1980s.” ​

Economists agree. There is no confusion about this.

As economist Thomas Piketty explains,

“The evidence suggests that progressive taxation of very high incomes and very large estates partly explains why the concentration of wealth never regained its astronomic Belle Époque levels after the shocks of 1914-1945.”

After all, the super rich and the super poor can exist only when the rich don’t pay their fair share.

When we stop making them pay, economic inequality rises.

As Forbes’ Joseph Thorndike writes,

“… The decline in high bracket [tax] rates since the 1980s — a phenomenon particularly evident in the United States and Great Britain — has helped boost incomes for the very rich in both countries.”

As the New York Times puts it,

“All of these candidates deny fiscal reality.”

Another New York Times article reports,

“‘Most economists today would agree that raising taxes modestly would bring in more revenue’ without doing any serious damage to the economy, said Roberton Williams, a fellow at the Tax Policy Center.”

And Ted Cruz’s bit about Reagan? That cutting taxes spurs growth?

“Yet the candidates assert, against historical evidence, that revenue losses from tax cuts will be offset by economic growth. Ted Cruz invoked the Reagan-era tax cuts as a model for success for his 10 percent flat-tax proposal. In fact, President Reagan raised taxes to close the budget deficit that opened up after he cut them in 1981.”

When the Texas Senator went on the Late Show with Stephen Colbert and said the exact same thing, the host corrected him that, actually,

“When conditions changed in the country, [Reagan] reversed his world’s ‘largest tax cut’ and raised taxes when revenues did not match the expectations.”

In fact, as PolitiFact reports,

“The 1982 tax increase was ‘probably the largest peacetime tax increase in American history,’ said economist Bruce Bartlett.”

Reagan ideologically wanted to cut taxes, but, in reality, he broadened the base and closed a bunch of loopholes because, in reality, slashing government revenue so much is a terrible thing.

Also in reality (which I know is not a place he lives), Cruz’s plan would be disastrous.

As the Washington Post writes,

“Mr. Cruz’s plan would reduce federal revenue in order to give huge tax cuts to the wealthy at a time when the government has to retire the baby boomers — and do much more….According to a dynamic analysis from the Tax Foundation, Mr. Cruz’s plan would cost the government $768 billion over 10 years. That’s not quite as expensive as Jeb Bush’s plan, which would cost about $1.6 trillion, according to another dynamic estimate. But both would nevertheless blow huge holes in the federal budget.”

These tax proposals benefit the wealthy, not the middle class as the candidates claim — this fact is roundly agreed upon.

From the New York Times,

The tax proposals from Jeb Bush, Donald Trump and Marco Rubio, while not as fantastical as those of Mr. Cruz and Mr. Carson, all make big and broad cuts, mostly to benefit the wealthiest Americans, including an end to the estate tax, cuts in tax rates and enhanced tax breaks for investments. The only way the Republican candidates could ever pay for such large tax cuts would be by slashing big spending programs, namely, Medicare and Social Security. The Republican candidate’s policies cut taxes for the rich. They’re good for the wealthy.”

From the Bloomberg View,

All of [the tax plans] would also ensure that the top 1 percent comes out way ahead…A rich person whose income comes mostly from investment would pay almost nothing in taxes under Rubio’s plan. The Tax Foundation estimates that Bush’s plan…would raise income… for taxpayers in the top 1 percent… by 11.6 percent.”

It’s not very surprising, when you understand that the people funding all these campaigns are fabulously wealthy. Of course the candidates are going to further legislation that gives tax cuts to the wealthy — that’s who’s putting them in office. And it’s why we’ve got to get big money out of politics.

We’re so jaded by what the government has become, what politicians have become, that we’re used to it. It’s “just politics.” But it’s not. Politicians lying, accepting millions of dollars, isn’t “just the way it goes.”

We can do whatever the hell we want.

This concept of “government” and “politics” is a human creation, the words we use to describe the concept of the organization of humans. Let us organize in some way that makes life fair and level for everyone, justice, liberty, freedom, equality, and fairness — why do we let these beautiful ideas get corrupted with this string of sounds,

pah – li – ticks.

With dangerous nonsense and unjust fantasy, that is how they’ll “fix” the country.

And by allowing the candidates to claim these different realities we doom ourselves to never enacting the change that all Americans — conservative, liberal, undecided, non-participatory — so desperately, desperately need.

 

Reprinted with permission from Daily Kos