Conservative economic theory is completely bunk because the conservative movement has sold out. Republicans– the debaters, proponents and implementers of conservative theories into government and American society– have entirely sold their souls for unprecedented campaign cash. And it looks like Marco Rubio (my prediction to win the GOP nomination as the Republican Party sifts through the crazier candidates for a supposedly “moderate” candidate, like the GOP did in choosing John McCain and Mitt Romney) has the inside track to billionaire quid pro quo donations.
But the Republican candidates’ promises of making America great again with tax cuts are empty platitudes. Republicans do not care about thrifty government spending, they do not care about deficits or the debt, and they definitely do not have any compassion or sympathy for the working poor, children, students, the retired and elderly, the disabled, the temporarily unemployed, mothers and fathers with newborn babies, or any other collateral damage demographics of capitalism’s total war on societal health for max profits. Tall claims, but all evidenced by the GOP’s Obama Era Congressional record.
Despite claims of fiscal responsibility, the field of Republican presidential candidates’ tax plans are solely about tax cuts. This is not surprising because Republicans have been calling for tax cuts for decades no matter the social, economic, political, national or international conditions in which the tax cut proposals are exclaimed. During George W. Bush’s presidency, America cut taxes while fighting two decade-plus wars on the other side of the world in an act of economic hubris defying all logic.
Logically it makes little sense that tax cuts can be recommended by Republicans both when the economy is doing great, and during economic calamities like the Great Depression or Great Recession. But that is the problem with contemporary conservative economic logic: there is none. America cannot cut taxes and reduce the budget. It is impossible for the economy to grow large enough to validate Republicans’ massive tax cuts, and American history proves this.
Reagan’s record-breaking tax cuts created such large deficits that he had to reverse himself and raise taxes in ’82, ’84, ’85, ’86, and ’87. But even though Reagan raised taxes five years out of a consecutive six, the federal debt tripled from $994 billion to $2.9 trillion. Reagan’s eight-year presidency proved conservative economic theory wrong.
President George H. W. Bush also raised taxes because of the federal debt, after pledging that he would not: “Read my lips: no new taxes.” However, because of Reagan’s epic tax cuts, Bush still added more than $1.5 trillion to the debt for which he cannot be entirely blamed.
President Bill Clinton actually lowered the deficit, and dramatically, but George W. Bush came into office and gave all that surplus money back. And cut taxes again, doubling the debt that Reagan tripled. Now President Barack Obama is cutting the deficit again to combat the free-falling economy he inherited.
That’s right, despite Republican politics, Democrats alone have shown the only fiscally conservative economic results at the national level. This short economic history shows that Republicans have never seriously reduced the debt. Conservative economic theory is all talk, and the reality is that Republicans have always been wrong about tax cuts.
But not satisfied with history? Take current events with Kansas’ dismal economic performance. Governor Sam Brownback tried to make Kansas the guinea pig of conservative economic policies, and Kansas sunk deep into the red instantly. Russell Berman of The Atlantic published a lovely analysis of what has gone wrong in “Failed Experiment” Kansas, and it is enlightening to see conservative theory prove itself wrong so entirely and with such speed. Predictably, and like Reagan before him, Governor Brownback has since raised taxes to try to reverse the economic free fall he created.
But there is a hidden agenda, and it is not just pseudo-religious faith in tax cuts that guide conservative economic policies. It’s Republicans’ genuine adherence to fuck-everyone-that’s-not-rich economics. Republicans genuinely do not want the government to improve society, because the rich people and corporations to which the conservative movement has sold out genuinely want to hoard all their money. They do not care how much debt the government has, as long as rich people get to keep as much of their money as possible. But in campaigning to get elected, Republicans pretend that they care about the debt.
Need proof? Take a look at Republicans’ other state experiment going on in Wisconsin. Failed presidential candidate Scott Walker has gutted most of the state’s socialistic groups and hopes, famously screwing over unions, teachers, Wisconsin’s nationally recognized University of Wisconsin system, workers’ protections, and environmental laws in order to bring back fiscal sanity.
However, Walker himself sold out on those fiscal principles because the $250 million he cut from Wisconsin’s higher education system in a belt-tightening sacrifice was given to Milwaukee’s NBA team for a new Bucks stadium. Public money, intended for and promised to social and educational development, was given to a massive private organization looking to hoard its own money and finance its new stadium with Wisconsin’s money.
Governor Walker sold out on his economic philosophy, and, to save face on his pledge to not raise taxes when his budget STILL went red, he had to borrow $1.3 billion to continue several ongoing transportation projects. Walker did not raise taxes, yes, but he did put Wisconsin into debt. Another conservative failure.
Because both Kansas and Wisconsin have been sandbagged, or sabotaged, by their governors, both governors’ approval ratings have plummeted accordingly. In conservative Kansas, Governor Brownback’s approval rating has fallen to 18%, ten points lower than President Obama in the state, and Brownback barely won reelection even as more than 100 Kansas Republican officials endorsed his Democratic opponent. And in liberal Wisconsin Governor Walker’s approval rating has dropped to 37%. Looks like Republicans are leaving messes for Democrats to clean up again.
If all this sounds negligent, Republican economic philosophy on the national level is even more disingenuous, and a bigger rip-off for America. It’s the same rationale: we need to spend less money. But instead of just spending less money, Republican presidential candidates also are continuing the drumbeat for massive tax cuts, which go overwhelmingly to rich people.
Take for example Ted Cruz’s 10% flat tax proposal. That sounds fair, until you think about it: a wildly unprogressive tax plan such as this means that the average American will see, in theory, a limited tax decrease, while rich people will see a catastrophically huge tax decrease. Catastrophic because rich people’s tax rate will go from 35% to 10% and it will bleed the government’s revenue dry. Even if rich people spent all of that income gain directly into the consumption economy tax system that is left, the sales tax revenue would pale in comparison to the income tax that the government would have received.
Consumption taxes will never, ever increase governmental net revenue via tax cuts because consumption offers a fraction of the revenue gained by income. The conservative idea to do away with income taxes entirely in favor of raising the sales tax to offset the consequent and massive loss of revenue is terrifying for anyone who is not rich. It is considered a “regressive” tax for its negative impact on already poor people because higher sales taxes make life considerably worse for people already in or near poverty, while allowing rich people to pocket virtually all of the money they make.
Now, again, it sounds intuitively fair for everyone to pay the same flat tax rate, or for people to pay taxes just on what they buy. Many people hate the idea of the government taking their money, but the reality is that liberal governance attempts to use that money to build a better society for everyone. And the people who benefit from social programs are the people who will never be rich no matter how long they live or how hard they work: virtually no teachers, coal miners, firefighters, restaurant servers, garbage collectors, etc. will ever be millionaires. But the people who do become millionaires and billionaires benefit from all of those professions doing their work dutifully, albeit for much less money comparatively. The country simply would not function without them.
President Barack Obama took a lot of political flak in the 2012 Election for his line “you didn’t build that”, but his philosophy is even more acceptable when it is considered in context with the rest of what he said:
“There are a lot of wealthy, successful Americans who agree with me because they want to give something back. They know they didn’t– look, if you’ve been successful you didn’t get there on your own.
I’m always struck by people who think, ‘Well, it must be because I was just so smart.’ There are a lot of smart people out there. ‘It must be because I worked harder than everybody else.’ Let me tell you something– there are a whole bunch of hardworking people out there.
If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business- you didn’t build that. Somebody else made that happen. The Internet didn’t get invented on its own. Government research created the Internet so that all the companies could make money off the Internet. So we say to ourselves, ever since the founding of this country, you know what, there are some things we do better together. That’s how we funded the GI Bill. That’s how we created the middle class. That’s how we built the Golden Gate Bridge or the Hoover Dam.
That’s how we sent a man to the moon. We rise or fall together as one nation as one people…
You’re not on your own, we’re in this together.”
All of this is true, and the relevant fact is that a lot of government spending actually helps rich people and giant corporations much more than it helps the average citizen, especially the poverty-stricken people lambasted for laziness by conservatives. For example, when the government builds and maintains giant ports it is not the average person who benefits enormously, it is corporations and the rich people who own them that are now able to easily and cheaply transport large quantities of goods across the globe to international markets to make a fortune.
My individual life would be fine if the government decided that America’s international sea ports didn’t deserve so much freebie handout money and shut down half of them, even with the consequent loss in product variety I would likely see in stores. Certain products would no doubt get a little more expensive, but if the economy of those goods stayed in America, my wage would increase appropriately without the mass exodus of jobs to cheaper economies overseas devaluing the work of employees all over the world.
This is a valid analogy: even though the government spends my tax money on international ports that make other people a lot more money than I will ever receive from sea port subsidies, I am not complaining or calling for the end of seaport welfare. But rich people, some of whose tax money goes to support the people negatively affected by their capitalistic fortunes, complain that their tax money is not spent solely on themselves and call for ending social welfare. And they are douchebags because public goods, despite conservative fear-mongering, make us freer as a society and makes everyone’s lives better.
The classic example of a public good versus taxpayer selfishness is a lighthouse. Every sailor gets to use the lighthouse for free in a way that saves their life or directs them where to go, but the government cannot force every sailor to pay for the lighthouse’s construction. Liberals would ask that all sailors pay a small amount of money to pay for the lighthouse, whereas conservatives would accuse the lighthouse builders of thievery even as they intend to use the lighthouse every day.
So the whole idea that taxes are totalitarian, and they destroy our freedom as citizens even as they are used to improve society for everyone is largely selfish. The reality is that corporations are legally required to maximize profits at the expense of employees, people, and society at large. But endless growth is in practice impossible because the resources our planet offers are not eternally infinite.
As a result of our unending race for economic gain, we are literally ruining our planet and many people’s lives in terms of deforestation, massive global extinction, economic inequality, and undeniable global warming. Nonstop growth may have occurred so far with occasional blips from wars and natural disasters, but it is unsustainable. And especially with global warming threatening entire continents within decades, we are clearly approaching the breaking point. One that Republican fantasies of eternal growth and a stable climate do not even consider as a possibility.
And even domestically America’s economy simply cannot have the endless growth needed in order for the government to rationalize drastically cutting rich people’s taxes so wildly. Conservatives fund and then cite crackpot economists and think tanks that promise numinous, “voodoo” revenue increases, and the growth that Republicans project in their tax plans, such as Jeb Bush’s promise of 4% annual economic growth, are preposterous and completely made up.
Ironically, it might be possible to foster the growth Republicans hope for, but only with liberal governance. For instance, a massive increase in economic growth could occur if America initiated a revolution in education, and offered free college tuition to any student who wanted it so that our brightest, most educated, optimistic and motivated youth were not burdened with tens of thousands of dollars of debt lasting a decade or more to pay off. Republicans claim that they love entrepreneurs, but they legislatively prevent our college-degreed youth from starting businesses because education is often one of Republicans’ first budget victims in offsetting the gaping deficit holes they create with reckless tax cuts.
And this has been studied more than one might think. The tax cuts that conservatives romanticize grow the economy much less than the social investments that liberals romanticize, and a Princeton University study in 2014 found that the performance gap in real GDP growth between Democrat presidents and Republican Presidents is “both large and statistically significant” in terms of a Democratic edge. This study shows that Jeb Bush’s exceedingly rosy promise of 4% growth would be more believable if he were campaigning for Bernie Sanders or Hillary Clinton.
But in truth, the American economy is much too large to realistically hope for 4% growth, especially throughout long-term projections. The International Monetary Fund calculated America’s 2014 Gross Domestic Product (GDP) at $17.4 trillion, and quick multiplication shows that 4% growth would equal about $700 billion for 2015. This growth is entirely unrealistic and imaginary, and would be akin to America adding the entire GDP of Sweden or Switzerland annually. Not realistic at all.
One can point out that China has had sustained GDP growth for years at 7%, and ask why not the same for America? But the fact is that China’s GDP in 1978 was a mere $216 billion, which is comparable to Qatar’s economy today. However, Qatar’s population is about 2 million, versus China’s 1978 population of 956 million.
Clearly China still has much more room to grow, and China also has four times the population as America, most of which is still much poorer than America’s populace. In terms of total GDP, China has room to far outpace the American economy, and the hope that America can have the same growth is a misguided one.
All in all, economic growth does not work the way Republicans really want it to work. And Reagan, George W. Bush, Sam Brownback, and Scott Walker are historical and living proof. Conservative economic policy works out the same way every time: Republicans get elected promising to fix the debt, they make massive tax cuts, the tax cuts instantly debunk conservative philosophies with massive deficits, they gut social programs of all kinds to try and balance the budget, and then they go on spending and borrowing money anyway, leaving large debts to their Democratic successors.
It is actually a beautiful plan because Democrats want to spend money on social programs to grow the economy from the bottom up rather than the top down like Republicans’ empty promises of trickle-down riches for poor people, so when Republicans leave huge debts, they then force Democrats to slash their own social programs. It’s like adding insult to injury because Republicans are only effectively concerned with cutting government spending nationally when they are in the minority, like when Democrats Bill Clinton and Barack Obama were in office. It’s evil genius politicking.
And this is not even a secret, as Republicans’ economic strategy for decades has been referred to as “starving the beast”. In 1978 Alan Greenspan, who was then the chairman of the Council of Economic Advisors, outlined this idea to the Senate Finance Committee explaining that, “the basic purpose of any tax cut program […] is to reduce the momentum of expenditure growth by restraining the amount of revenue available and trust that there is a political limit to deficit spending.”
But ironically Republican presidents have not themselves limited deficit spending since then. They have continued giving tax cuts to rich people, which in a way is like deficit spending because the government is giving up so much of the money that it would have received.
These top-down tax cuts have led to the massive economic inequality developed since the Reagan Administration, and Republican economic policies increasingly cater only to people who are already rich. And it’s obvious with Republicans gaining such lopsided advantages from the recent Wild West-ization of campaign financing. The American people are wholly irrelevant to Republican ideology because the majority of voters are not spending $900 million on the 2016 Election like the Koch brothers, or $100 million-plus like Sheldon Adelson. Quid pro quo abounds.
The Republican presidential candidates’ pathos over unfair, burdensome taxes making it so hard to become a billionaire are pure absurdity because their campaigns are being paid for increasingly by people who are already billionaires. The Koch brothers want lower taxes, but they already have a combined $100 billion. Walmart wants lower corporate taxes, but Walmart has become an effective money laundering front for corporate welfare. Clearly it is not impossible to make a fortune in America, and billionaires’ claims that taxes are too high are suspect and quite paradoxical.
Rich people and corporations are not worried about government spending, they just don’t want to give any money back to America, the country that enabled them to get rich. And that is why conservatism is a sham, a hoax, and unashamed economic hubris. Unfortunately, rich people and corporations are trickling down to Republican super PACS.
Image via AP