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“Republicans Are Plotting Economic Disaster For 2016: The American People Will Be The Collateral Damage

Since George W. Bush’s presidency, Republican economic ideas have become drastically more conservative. Instead of massive tax cuts for the rich coupled with a general tolerance of the rest of government (or even new welfare programs), the party is now committed to much larger tax cuts coupled with eye-watering cuts to government.

Every Republican presidential candidate proposes staggering tax cuts heavily weighted toward the rich. Donald Trump would give the top one-thousandth of taxpayers $1.3 million apiece per year, while Ted Cruz would give them an even $2 million. Trump does favor preserving the welfare state, but he is a marked outsider in this respect. The entire rest of the party is committed to gigantic cuts to welfare, as shown by the budget formulated by House Republicans. Their most recent plan would slash $5.3 trillion in spending over a decade, 69 percent of which would come from programs for the needy.

The party’s intellectual apparatus (distinct from the Trumpist insurgency) has more-or-less fully regressed to an economic libertarianism straight out of the 1920s. They view basically all government programs outside of the military and the courts as illegitimate, to be slashed or eliminated wherever possible. The only problem with this is that when you try it, the results are immediate disaster.

Republicans haven’t been able to fully implement their plan of tax and service cuts on the federal level, but they have tried it in a few places on the state level. Louisiana under Gov. Bobby Jindal has had it the worst. Jindal’s massive cuts to education and services were not nearly enough to cover his gigantic tax cuts, and draining every rainy day fund in the state only delayed the day of reckoning. Eventually the results were so disastrous that the unthinkable happened — a Democrat replaced Jindal. Now Gov. John Bel Edwards is scrambling to deal with the most extreme budgetary emergency of any state government in decades, working feverishly just to keep the state from literal financial collapse.

Kansas is also suffering from Republican quack economics. Gov. Sam Brownback (who barely scraped through re-election in 2014 and now sits at a 21-percent approval rating) tried the same tricks as Jindal, though to a somewhat lesser degree, and the results were similar: a huge budget deficit with none of the promised explosive growth or job gains. Now Kansas conservatives are running into problems with the state’s Supreme Court, which found legal problems with the distribution of education cuts. Their solution: Attack the justices politically, by drawing up a new impeachment law and trying to get them thrown out in an upcoming confirmation election.

It’s the same story in Wisconsin with both deficits and lousy economic performance. Gov. Scott Walker’s major innovation has been an effort to basically destroy the Wisconsin state university system with drastic cuts and the abolishment of tenure, which is already leading to serious problems at the flagship school in Madison.

However, it could have been worse for all these states. The federal government, with its grants, its spending on social programs, and its employment of in-state government workers and contractors, provides a buffer of spending state governments cannot cut. For example, Louisiana gets over 40 percent of its state budget from the feds, as well as $5,917 per person in social spending, $3.5 billion in federal contracts, and $5.3 billion in compensation paid to almost 68,000 federal workers (as of the most recent data). That’s $48 billion in income against $39 billion paid in federal taxes (other states don’t make out so well).

This means that the results would be far more disastrous should Republicans get to implement their ideas on a federal level. Great chunks of the federal programs — food stamps, federal health programs, the Earned Income Tax Credit, and so on — that have provided inadequate but vital economic stabilization would be cut or eliminated altogether.

The results would be just as what happened on the state level, only worse.

It took many years for Republicans to talk themselves out of the fact that Herbert Hoover’s presidency was a disastrous failure, but with the exception of Trump, Hooverism is where they stand. It’s an ideology that can gain wide popularity only insofar as it is not actually tried on a wide scale. It turns out that a vision of government that was already outdated a century ago (when farmers were over a quarter of the workforce) is not very well-suited to a modern economy. It’s just too bad the American people might have to be the collateral damage in re-learning that lesson.

 

By: Ryan Cooper, The Week, April 4, 2016

April 6, 2016 - Posted by | Economic Policy, Republicans, Spending Cuts, Tax Cuts | , , , , , , ,

1 Comment »

  1. Reblogged this on Bell Book Candle.

    Like

    Comment by walthe310 | April 6, 2016 | Reply


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