“Enduring In Stranger Forms”: The Reagan Era Is Still Going
Religious leaders and religious communities are mostly united on the idea that we humans are bound together in a web of reciprocity and mutual support – and that there is something godly about such interdependence. Thus, for example, Gov. John Winthrop, adjuring the company that was about to sail from Southampton to the New World in 1630:
We must be willing to abridge ourselves of our superfluities, for the supply of others’ necessities. We must uphold a familiar commerce together in all meekness, gentleness, patience and liberality. We must delight in each other; make others’ conditions our own; rejoice together, mourn together, labor and suffer together, always having before our eyes our commission and community in the work, as members of the same body.
Ethicist and historian Gary Dorrien finds very little of Winthrop’s spirit in the never-ending attacks mounted against progressive taxation by today’s Republicans: they all like the “City Upon a Hill” part of Winthrop’s sermon, but they ignore the part about what it takes, values-wise, to deserve that hilltop. – eds.
The Reagan era was supposed to have ended in November 2008—killed off by 30 years of flat wages and capitulation to Wall Street leading to a colossal financial crash. But today the Reagan era is enduring in stranger forms than ever.
Republican leaders want to bust unions and give another tax cut to corporations and the rich, plus eliminate taxes on capital gains and inheritance. They want to privatize Social Security, turn Medicare into a voucher program, reduce Medicaid to block grants, and abolish the Affordable Care Act. They want a balanced budget amendment to the Constitution that caps federal spending at 18 percent of the total economy, a figure last reached in 1966. They took the nation hostage in a debt ceiling drama to win an atrocious budget deal. And much of the Republican Party thrives on conspiracy theories about America’s first black president.
It should be politically fatal to lurch so far into a bizarre-world of anti-government ultimatums and related obsessions. But the Republican Party tells a story of our time that many Americans find compelling. It is the Reagan story about a great people being throttled by a voracious federal government. According to this story, government is always the problem, Americans are over-taxed, and America has a debt crisis because Democrats overgrew the government. Every Republican contender for president tells this story, notwithstanding that Americans are not over-taxed and it was chiefly the Republican Party that exploded the debt.
From the early 1970s through the 1990s, Americans averaged 27 percent of their income on federal, state, and local taxes. Today that figure is 23 percent, a 53-year low. As a percentage of GDP, American taxation is at its lowest level since 1950, 14.8 percent—well below the take of other wealthy nations.
More importantly, the debt problem is a byproduct of tax policies that have fueled massive inequality since the early 1980s. It cannot be solved with any moral decency without rectifying the legacy of Ronald Reagan, who led the Republican Party and many Democrats into temptation by contending that deficits don’t matter because tax cuts pay for themselves. When Reagan took office in 1981 the national debt was $907 billion and America was the world’s leading creditor nation. In eight years Reagan tripled the national debt and turned America into the world’s leading debtor nation. Reagan slashed the marginal tax rate from 70 percent to 28 percent, and the top rate on capital gains from 49 percent to 20 percent, fueling a blowout for inequality. George H. W. Bush, vowing to maintain Reagan’s winning approach, let the debt escalate to almost $4 trillion, which scared him enough to break his vow, raise the marginal rate to 35 percent, demoralize his party, and lose a second term.
The only break in America’s post-1980 record of escalating debt was the Clinton Administration, which raised the marginal rate to 39.6 percent and rang up budget surpluses of $70 billion in 1998, $124 billion in 1999, and $237 billion in 2000. Had the U.S. stuck with Clinton’s fiscal policy, the cumulative budget surplus would have reached $5.6 trillion by 2011, wiping out the national debt.
George W. Bush quickly squandered all of that. His tax cuts blew a $2 trillion hole in the deficit. He charged the expenses for two wars, officially over $1 trillion, with long-term costs that will triple that figure. He added a $1 trillion Medicare prescription drug benefit without paying for it either, creating the first entitlement in American history lacking a revenue source. Then the casino economy that Clinton and Bush deregulated crashed. In eight years the Bush administration piled up new debt and accrued obligations of $10.35 trillion, and doubled the national debt from $5.7 trillion to $11.3 trillion. Bush amassed more debt in eight years than America’s previous forty-two presidents combined, and the record keeps growing, as three-quarters of the debt amassed on Obama’s watch is the outgrowth of Bush’s unpaid tax cuts, unpaid wars, and unpaid drug benefit, and much of the rest is cleanup for the financial crash.
Obama inherited a deflating economy teetering on an outright depression, a skyrocketing debt, and two wars. When he took office the economy was shrinking by 6 percent annually. Had these losses continued, the U.S. would have been in a depression within 9 months of his inauguration.
Obama averted a depression with a modest, under-funded stimulus that Republicans condemned as outrageously radical, Socialist, and un-American. This absurd position enabled Republicans to win a huge political windfall, which has made the Republican Party crazier than ever.
Mitt Romney proposes to cut income tax rates by 20 percent and the corporate rate by 10 points, plus abolish the estate tax. Rick Santorum proposes to cut the marginal rate by 7 points, reduce the number of tax brackets from six to two, cut the corporate rate in half to 17.5 percent, and eliminate the estate tax and corporate taxes in the manufacturing sector. Newt Gingrich proposes to install a 15 percent flat tax for income and to abolish the capital gains tax, so one-percenters like Romney could pay no taxes at all instead of 14 percent. All of these plans wildly exceed George W. Bush’s disastrous cuts of 4 percent in the marginal rate and 5 percent in capital gains, with no compensating proposals to eliminate shelters and loopholes. All would reduce federal tax revenue by at least 40 percent.
We are supposed to rest assured that Republicans would find savings by breaking America’s social contracts on Medicare, Medicaid, and Social Security. But Americans support Medicare by 85 percent, and over two-thirds believe that the wealthy should pay more taxes. This is the year, and the election, in which the Reagan era really needs to be ended.
By: Gary Dorrien, Religion Dispatches, March 7, 2012
Four Fiscal Phonies: GOP “Irresponsible Deficit Hysteria” Presidential Candidates
Mitt Romney is very concerned about budget deficits. Or at least that’s what he says; he likes to warn that President Obama’s deficits are leading us toward a “Greece-style collapse.”
So why is Mr. Romney offering a budget proposal that would lead to much larger debt and deficits than the corresponding proposal from the Obama administration?
Of course, Mr. Romney isn’t alone in his hypocrisy. In fact, all four significant Republican presidential candidates still standing are fiscal phonies. They issue apocalyptic warnings about the dangers of government debt and, in the name of deficit reduction, demand savage cuts in programs that protect the middle class and the poor. But then they propose squandering all the money thereby saved — and much, much more — on tax cuts for the rich.
And nobody should be surprised. It has been obvious all along, to anyone paying attention, that the politicians shouting loudest about deficits are actually using deficit hysteria as a cover story for their real agenda, which is top-down class warfare. To put it in Romneyesque terms, it’s all about finding an excuse to slash programs that help people who like to watch Nascar events, even while lavishing tax cuts on people who like to own Nascar teams.
O.K., let’s talk about the numbers.
The nonpartisan Committee for a Responsible Federal Budget recently published an overview of the budget proposals of the four “major” Republican candidates and, in a separate report, examined the latest Obama budget. I am not, by the way, a big fan of the committee’s general role in our policy discourse; I think it has been pushing premature deficit reduction and diverting attention from the more immediately urgent task of reducing unemployment. But the group is honest and technically competent, so its evaluation provides a very useful reference point.
And here’s what it tells us: According to an “intermediate debt scenario,” the budget proposals of Newt Gingrich, Rick Santorum, and Mitt Romney would all lead to much higher debt a decade from now than the proposals in the 2013 Obama budget. Ron Paul would do better, roughly matching Mr. Obama. But if you look at the details, it turns out that Mr. Paul is assuming trillions of dollars in unspecified and implausible spending cuts. So, in the end, he’s really a spendthrift, too.
Is there any way to make the G.O.P. proposals seem fiscally responsible? Well, no — not unless you believe in magic. Sure enough, voodoo economics is making a big comeback, with Mr. Romney, in particular, asserting that his tax cuts wouldn’t actually explode the deficit because they would promote faster economic growth and this would raise revenue.
And you might find this plausible if you spent the past two decades sleeping in a cave somewhere. If you didn’t, you probably remember that the same people now telling us what great things tax cuts would do for growth assured us that Bill Clinton’s tax increase in 1993 would lead to economic disaster, while George W. Bush’s tax cuts in 2001 would create vast prosperity. Somehow, neither of those predictions worked out.
So the Republicans screaming about the evils of deficits would not, in fact, reduce the deficit — and, in fact, would do the opposite. What, then, would their policies accomplish? The answer is that they would achieve a major redistribution of income away from working-class Americans toward the very, very rich.
Another nonpartisan group, the Tax Policy Center, has analyzed Mr. Romney’s tax proposal. It found that, compared with current policy, the proposal would actually raise taxes on the poorest 20 percent of Americans, while imposing drastic cuts in programs like Medicaid that provide a safety net for the less fortunate. (Although right-wingers like to portray Medicaid as a giveaway to the lazy, the bulk of its money goes to children, disabled, and the elderly.)
But the richest 1 percent would receive large tax cuts — and the richest 0.1 percent would do even better, with the average member of this elite group paying $1.1 million a year less in taxes than he or she would if the high-end Bush tax cuts are allowed to expire.
There’s one more thing you should know about the Republican proposals: Not only are they fiscally irresponsible and tilted heavily against working Americans, they’re also terrible policy for a nation suffering from a depressed economy in the short run even as it faces long-run budget problems.
Put it this way: Are you worried about a “Greek-style collapse”? Well, these plans would slash spending in the near term, emulating Europe’s catastrophic austerity, even while locking in budget-busting tax cuts for the future.
The question now is whether someone offering this toxic combination of irresponsibility, class warfare, and hypocrisy can actually be elected president.
By: Paul Krugman, Op-Ed Columnist, The New York Times, March 1, 2012
What Ails Europe?: Republicans Have No Idea What They’re Talking About
Lisbon.
Things are terrible here, as unemployment soars past 13 percent. Things are even worse in Greece, Ireland, and arguably in Spain, and Europe as a whole appears to be sliding back into recession.
Why has Europe become the sick man of the world economy? Everyone knows the answer. Unfortunately, most of what people know isn’t true — and false stories about European woes are warping our economic discourse.
Read an opinion piece about Europe — or, all too often, a supposedly factual news report — and you’ll probably encounter one of two stories, which I think of as the Republican narrative and the German narrative. Neither story fits the facts.
The Republican story — it’s one of the central themes of Mitt Romney’s campaign — is that Europe is in trouble because it has done too much to help the poor and unlucky, that we’re watching the death throes of the welfare state. This story is, by the way, a perennial right-wing favorite: back in 1991, when Sweden was suffering from a banking crisis brought on by deregulation (sound familiar?), the Cato Institute published a triumphant report on how this proved the failure of the whole welfare state model.
Did I mention that Sweden, which still has a very generous welfare state, is currently a star performer, with economic growth faster than that of any other wealthy nation?
But let’s do this systematically. Look at the 15 European nations currently using the euro (leaving Malta and Cyprus aside), and rank them by the percentage of G.D.P. they spent on social programs before the crisis. Do the troubled Gipsi nations (Greece, Ireland, Portugal, Spain, Italy) stand out for having unusually large welfare states? No, they don’t; only Italy was in the top five, and even so its welfare state was smaller than Germany’s.
So excessively large welfare states didn’t cause the troubles.
Next up, the German story, which is that it’s all about fiscal irresponsibility. This story seems to fit Greece, but nobody else. Italy ran deficits in the years before the crisis, but they were only slightly larger than Germany’s (Italy’s large debt is a legacy from irresponsible policies many years ago). Portugal’s deficits were significantly smaller, while Spain and Ireland actually ran surpluses.
Oh, and countries that aren’t on the euro seem able to run large deficits and carry large debts without facing any crises. Britain and the United States can borrow long-term at interest rates of around 2 percent; Japan, which is far more deeply in debt than any country in Europe, Greece included, pays only 1 percent.
In other words, the Hellenization of our economic discourse, in which we’re all just a year or two of deficits from becoming another Greece, is completely off base.
So what does ail Europe? The truth is that the story is mostly monetary. By introducing a single currency without the institutions needed to make that currency work, Europe effectively reinvented the defects of the gold standard — defects that played a major role in causing and perpetuating the Great Depression.
More specifically, the creation of the euro fostered a false sense of security among private investors, unleashing huge, unsustainable flows of capital into nations all around Europe’s periphery. As a consequence of these inflows, costs and prices rose, manufacturing became uncompetitive, and nations that had roughly balanced trade in 1999 began running large trade deficits instead. Then the music stopped.
If the peripheral nations still had their own currencies, they could and would use devaluation to quickly restore competitiveness. But they don’t, which means that they are in for a long period of mass unemployment and slow, grinding deflation. Their debt crises are mainly a byproduct of this sad prospect, because depressed economies lead to budget deficits and deflation magnifies the burden of debt.
Now, understanding the nature of Europe’s troubles offers only limited benefits to the Europeans themselves. The afflicted nations, in particular, have nothing but bad choices: either they suffer the pains of deflation or they take the drastic step of leaving the euro, which won’t be politically feasible until or unless all else fails (a point Greece seems to be approaching). Germany could help by reversing its own austerity policies and accepting higher inflation, but it won’t.
For the rest of us, however, getting Europe right makes a huge difference, because false stories about Europe are being used to push policies that would be cruel, destructive, or both. The next time you hear people invoking the European example to demand that we destroy our social safety net or slash spending in the face of a deeply depressed economy, here’s what you need to know: they have no idea what they’re talking about.
By: Paul Krugman, Op-Ed Columnist, The New York Times, February 26, 2012
“Poor-People Programs”: Mitt Romney’s Budget In About 150 Words
Let’s try to make this as simple as possible. Money comes into the federal government through taxes and bonds. The vast majority of it is then spent on old-people programs, poor-people programs, and defense.
Mitt Romney is promising that taxes will go down, defense spending will go up, and old-people programs won’t change for this generation of retirees. So three of his four options for deficit reduction — taxes, old-people programs, and defense — are now either contributing to the deficit or are off-limits for the next decade.
Romney is also promising that he will pay for his tax cuts, pay for his defense spending, and reduce total federal spending by more than $6 trillion over the next 10 years. But the only big pot of money left to him is poor-people programs. So, by simple process of elimination, poor-people programs will have to be cut dramatically. There’s no other way to make those numbers work.
By: Ezra Klein, The Washington Post, February 25, 2012
Are Republicans Hypocrites By Nature?
The fire-and-brimstone Christian Right bible-thumper who gets busted buying crack cocaine from a male prostitute, or the “family values” conservative who turns out to be a serial philanderer. These are now stock characters out of GOP central casting.
But other than the rather tedious accumulation of examples of self-righteous Republicans who want us to do as they say and not as they do, is there something about Republicanism itself that produces these double standards? Is hypocrisy, in short, endemic to conservatism?
That is what Washington Post liberal E.J. Dionne wants to know. In his column this week, Dionne says that hypocrisy – “the gap between ideology and practice” — has now reached a “crisis point” in American conservatism.
“This Republican presidential campaign is demonstrating conclusively that there is an unbridgeable divide between the philosophical commitments conservative candidates make before they are elected and what they will have to do when faced with the day-to-day demands of practical governance,” writes Dionne. “Conservatives in power have never been — and can never be — as anti-government as they are in a campaign.”
In an oft-quoted 2006 essay in Washington Monthly, “Why Conservatives Can’t Govern,” Boston College professor Alan Wolfe called contemporary conservatism “a walking contradiction” since conservatives were unable to shrink government but also unwilling to improve government and so ended up splitting the difference in ways that resulted in “not just bigger government, but more incompetent government.”
The problem begins, says Wolfe, when conservatives promise to shrink the size and reach of the federal government but find once in office they are “under constant pressure from constituents to use government to improve their lives.” And this, says Wolfe, “puts conservatives in the awkward position of managing government agencies whose missions — indeed, whose very existence — they believe to be illegitimate.”
To Dionne, this pulling in opposite directions is what inevitably makes conservatives hypocrites.
Why, for example, are so many conservatives anti-government while spending long careers drawing paychecks from the taxpayers? asks Dionne. Why also do conservatives “bash government largesse while seeking as much of it as they can get for their constituents and friendly interest groups?”
Why do conservatives criticize entitlements and big government yet promise their older, conservative base they will “never, ever to cut their Medicare or Social Security?”
And what about defense? Why do Republicans support the free market yet refuse to consider any cuts at all in the bloated Military Industrial Complex that takes taxpayer dollars and transforms them into private profits.
The list goes on. The reason our political system is so “broken,” says Dionne, is that conservatives are hypocrites who keep making “anti-government promises that they know perfectly well they are destined to break.”
Dionne’s criticisms are well taken. But he needs to dig deeper. It’s not just small-government conservatives who are hypocrites about the size and cost of government they are willing to support. It’s that conservatism itself, as a collection of ideas about organizing society, inevitably breeds hypocrisy.
Conservatives are sure to cry foul and will no doubt respond by producing a mountain of examples where liberals have behaved hypocritically. I am sure they can. But that’s beside the point. The real point is that liberals care about hypocrisy and conservatives don’t.
Here’s why: liberals want to build a larger community by weaving together the different threads in our society into a fuller and more varied tapestry. This multi-culturalism and promotion of diversity, in fact, is what conservatives hate most about liberals since conservatives want to defend the community they already have by keeping others out, and by using politics to do it.
Hypocrisy matters to liberals because the only way to build a larger community is by first building trust. And the only way to build trust is by treating everyone equally — by consistently and impartially applying the same universal principles to like individuals in like situations.
Hypocrisy is the unequal application of principle, producing an arbitrariness that eats like a cancer at the connective tissue of the ethnically, religiously, and demographically diverse communities liberal societies hope to create.
Hypocrisy matters to liberals like Rachel Maddow — a lot — as her long-time listeners well know. Nothing makes Maddow madder than when people say one thing and do another. The best parts of her show, in fact, are when she takes apart right wing hypocrites with prosecutorial precision, exposing Republicans who attack Obama’s “job-killing” stimulus program on Fox News while taking credit for the jobs actually created in their local newspapers back home.
When Republicans accused Democrats of destroying the American Republic by using budget “reconciliation” to pass the Affordable Health Care Act, you could see the glee (and contempt) in Maddow’s eye as Republican duplicity was exposed as she quietly sat there while example after example of Republicans using reconciliation when they were in charge scrolled endlessly across the screen.
I watch Maddow’s surgical dissection of Republicans and think they’ve got to be devastated. But then I listen afterward, dumbfounded, as their only takeaway from this embarrassing unmasking is that Maddow is a partisan hack.
But after all, why should a right wing conservative care if he’s ridiculed for applying one standard to one group and a different standard to his? Why should he care if he is called a hypocrite considering that his ultimate objective is to guarantee the supremacy of white, Christian, affluent males?
Or take a charlatan preacher like Franklin Graham, whose sole objective isn’t saving souls but electing other Republicans. Why should Graham care if his duplicity is called out on national TV when he insists it’s impossible for him to vouch for the authenticity of President Obama’s Christian devotion while Graham eagerly does just that for Rick Santorum or even the three-timing Newt Gingrich?
Man is moral but society is not, the liberal theologian Reinhold Niebuhr reminds us. Telling the truth and being true to our stated principles may be sovereign in our personal lives but can easily give way to the demands of our political commitments, as right wing conservatives know all too well.
Hypocrisy matters to liberals because the principles of equality and fair-dealing upon which our liberal way of life depends matter to liberals — and when those principles are impartially applied bridge the differences that creates a society greater than the sum of its parts.
Right wing conservatives do not share this vision of the Great Society and so are untroubled by hypocrisy because their first and only commitment is to their group.
We are a nation not of blood and soil but of ideas, President George W. Bush told us in his second inaugural. Liberals accept that belief implicitly. Right wing conservatives do not. To this new generation of radical conservatives, societies are still based on soil and blood. With the emphasis on blood.
By: Ted Frier, Open Salon, February 23, 2012
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