February 1, 2010--The Party of Magical Thinking
Republicans in Congress voted against pay-as-you-go, which as spending hawks one would have assumed they would have supported since it requires fiscal restraint. One of their mantras. Pay-Go mandates that any new spending, including any tax cuts have to be paid for since spending is spending and tax cuts are versions of spending. (See linked New York Times article.)
They voted this way in their usual lockstep so as not to have to pay for any tax cuts they might somehow be able to get approved. Not paying for them would add to the deficit, a reality with which they have considerable experience since both the Reagan and Bush tax cuts were not paid for--they were simply added to the deficit.
But this didn't stop them Friday when meeting with President Obama. At the centerpiece of their economic plan is the familiar call for more "across-the-board tax cuts." Obama rejected any notion of cutting taxes in this manner. As he put it, he's not in favor of a tax break for Warren Buffet. The Republican kind, that is, which would again only expand the gap between the wealthiest Americans and the rest of us and bury us in further debt. (Buffet himself, by the way, is opposed to tax cuts of this sort.)
Obama also rejected their unverifiable assertion that the stimulus plan that they offered--again mostly across-the-board tax cuts--would have cost half what Obama's did and have created twice as many jobs. When hearing this idea it took all his self control to keep from laughing in their faces. Rather than creating more jobs than the Obama stimulus plan and allegedly costing less, an independent analysis of the GOP tax cut plan concluded that it would add up to $3.0 trillion more to our debt. That's trillion with a T.
As evidence that across-the-board tax cuts are good for the economy, GOP leaders claim that those which were enacted during the Reagan years and more recently during George W. Bush's presidency were stimulative. Whatever other good they may or may not have done for the U.S. economy (and the positive effect for average people is less than slight), one thing is certain--these tax cuts added significantly to our national debt.
When Ronald Reagan took office our collective debt was nearly $1.0 trillion ($0.91 trillion); when he left office eight years later it had almost tripled to $2.60 trillion. And during Bush's presidency, at least $4.0 trillion more was added to our national debt burden. So much for the power of these kinds of tax cuts to grow our economy and reduce our debt.
Another aspect of the GOP's magical thinking was their claim at the same encounter with Obama that they too have a health care plan. An even better one than Obama's in that it would do everything that is in his plus providing coverage for everyone not curently insured. Everyone. Even Obama's plan leaves out 10 million. And especially they asserted it too would not cost anything. Amazing! Again showing remarkable restraint Obama casually pointed out that there is no such free lunch. He indicated that you can't cover another 55 million Americans and not have it cost anything. To this the room was silent.
And no wonder since the actual Republican plan would extend coverage to only an additional 3 million people by 2019 but leave 52 million others uninsured. The Democrat plan, by contrast, would cover an additional 36 million Americans over the same period of time. Not "universal" coverage to be sure, but it is much more extensive than the GOP's and over a decade would reduce the debt by nearly a trillion dollars because it is paid for by cost savings and increased taxes on the most expensive of private insurance.
On reflection I thought that this kind of Republican irresponsible thinking--and if they had the power, behavior--is the very sort of thing that got our economy and millions of people into such serious trouble. Borrow, borrow, borrow and with that borrowed money spend, spend, spend. A recipe for disaster.
Clearly the Republicans have learned nothing about fiscal policy from the experience of the past 30 years. We see what the Reagan and Bush tax cuts did to our economy and national debt. But undeterred, these GOPers are clamoring for more of the ruinous same. I continue to have my problems with Obama and his adminsitration, but at least he is not delusional.
They voted this way in their usual lockstep so as not to have to pay for any tax cuts they might somehow be able to get approved. Not paying for them would add to the deficit, a reality with which they have considerable experience since both the Reagan and Bush tax cuts were not paid for--they were simply added to the deficit.
But this didn't stop them Friday when meeting with President Obama. At the centerpiece of their economic plan is the familiar call for more "across-the-board tax cuts." Obama rejected any notion of cutting taxes in this manner. As he put it, he's not in favor of a tax break for Warren Buffet. The Republican kind, that is, which would again only expand the gap between the wealthiest Americans and the rest of us and bury us in further debt. (Buffet himself, by the way, is opposed to tax cuts of this sort.)
Obama also rejected their unverifiable assertion that the stimulus plan that they offered--again mostly across-the-board tax cuts--would have cost half what Obama's did and have created twice as many jobs. When hearing this idea it took all his self control to keep from laughing in their faces. Rather than creating more jobs than the Obama stimulus plan and allegedly costing less, an independent analysis of the GOP tax cut plan concluded that it would add up to $3.0 trillion more to our debt. That's trillion with a T.
As evidence that across-the-board tax cuts are good for the economy, GOP leaders claim that those which were enacted during the Reagan years and more recently during George W. Bush's presidency were stimulative. Whatever other good they may or may not have done for the U.S. economy (and the positive effect for average people is less than slight), one thing is certain--these tax cuts added significantly to our national debt.
When Ronald Reagan took office our collective debt was nearly $1.0 trillion ($0.91 trillion); when he left office eight years later it had almost tripled to $2.60 trillion. And during Bush's presidency, at least $4.0 trillion more was added to our national debt burden. So much for the power of these kinds of tax cuts to grow our economy and reduce our debt.
Another aspect of the GOP's magical thinking was their claim at the same encounter with Obama that they too have a health care plan. An even better one than Obama's in that it would do everything that is in his plus providing coverage for everyone not curently insured. Everyone. Even Obama's plan leaves out 10 million. And especially they asserted it too would not cost anything. Amazing! Again showing remarkable restraint Obama casually pointed out that there is no such free lunch. He indicated that you can't cover another 55 million Americans and not have it cost anything. To this the room was silent.
And no wonder since the actual Republican plan would extend coverage to only an additional 3 million people by 2019 but leave 52 million others uninsured. The Democrat plan, by contrast, would cover an additional 36 million Americans over the same period of time. Not "universal" coverage to be sure, but it is much more extensive than the GOP's and over a decade would reduce the debt by nearly a trillion dollars because it is paid for by cost savings and increased taxes on the most expensive of private insurance.
On reflection I thought that this kind of Republican irresponsible thinking--and if they had the power, behavior--is the very sort of thing that got our economy and millions of people into such serious trouble. Borrow, borrow, borrow and with that borrowed money spend, spend, spend. A recipe for disaster.
Clearly the Republicans have learned nothing about fiscal policy from the experience of the past 30 years. We see what the Reagan and Bush tax cuts did to our economy and national debt. But undeterred, these GOPers are clamoring for more of the ruinous same. I continue to have my problems with Obama and his adminsitration, but at least he is not delusional.
posted by Steven Zwerling at
1:01 AM
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