Tuesday, July 31, 2012

Why the GOP Cannot be Believed

by Len Hart, The Existentialist Cowboy

GOP dogma goes like this: government regulation is excessive, a drag on the economy, an impediment to growth. For the GOP that's a 'given', an article of faith! Reagan's solution was a 30% tax cut which primarily benefited ONLY the nation's 'elite'. It is without doubt the origin of the so-called 'ruling 1 percent'.

Occassionally one runs across one or two paragraphs that simply 'hit the nail on the head'. Following are two that do precisely that. The topics are Ronald Reagan and 'trickle down theory':
"Tax relief for the rich would enable them to spend and invest more. This new spending would stimulate the economy and create new jobs. Reagan believed that a tax cut of this nature would ultimately generate even more revenue for the federal government. The Congress was not as sure as Reagan, but they did approve a 25% cut during Reagan's first term.

The results of this plan were mixed. Initially, the FEDERAL RESERVE BOARD believed the tax cut would re-ignite inflation and raise interest rates. This sparked a deep recession in 1981 and 1982. The high interest rates caused the value of the dollar to rise on the international exchange market, making American goods more expensive abroad. As a result, exports decreased while imports increased. Eventually, the economy stabilized in 1983, and the remaining years of Reagan's administration showed national growth."

--The Reagan Years, Reaganomics
In a phrase: wealth did not 'trickle-down'. Instead --wealth literally flowed upward as only the upper quintile benefited from Reagan's tax cuts. Investment in the U.S. economy did not increase as we had been told it would! It is safe to say that 'investments' in offshore bank accounts enjoyed a boom! That the Regan tax-cut was followed by recession/depression of some two years --the deepest/longest since Hoover --is proof enough that none of the 'tax cut' benefited working Americans in any way whatsoever.

The right wing is heavily 'invested' in 'trickle-down' economics. Some may truly believe that unfair tax cuts will stimulate the economy. I have given this group the benefit of doubt. But one is tempted to put one's hard-earned tax cut on the truth of this assertion: GOP tax cuts have, in fact, been the root cause of every GOP depression/recession since 1900!

When the GOP eschews its creation of the 'ruling 1 percent', I will begin to take them seriously.


mijj said...

i think what the Major Political Parties are really saying is: any part of government that provides a service to the general public is pure waste and should be converted into a source of profit.

Ie. All public services should be transformed into XXX-industrial complex profit generators.

For the dull-witted and pin-headed "efficiency" is defined as profit/cost. If no-one is getting massively wealthy then there is no "efficiency".

The unwashed masses are the source of wealth. The target public service is the means by which that wealth is extracted. "Efficiency" is maximized by minimising the proportion of extracted wealth fed back into providing quality of service. The bigger the sucking sound, the higher the "efficiency".

Len Hart said...

Glad you mentioned 'efficiency'. As Regan's tax cut were followed very quickly by the deepest, longest recession/depression since Hoover's 'great' one, one must conclude that income and wealth inequities result in inefficient economies. An 'inefficient' economy is, by definition, an economy that should be producing more with less but is not! At last, that's because the true wealth of a nation, the worth of its currency et al is not the amount of GOLD in Fort Knox (if any there is). No --the net WEALTH of a nation is the total value of what it produces. The U.S. has been on the very bottom of the CIA's World Fact Book with the world's largest NEGATIVE Current Account Balance for quite some time now.

Anonymous said...

i propose:

national efficiency = quality of life / cost of living