anything he wants to.
Recently I read a short item in the local paper that reported the President is
challenging Congress to pass his new round of tax cuts. In the same two-
paragraph story he called on Congress to trim the deficit by reining in
spending on certain domestic programs (in other words, programs that
waste money by helping poor people). Am I the only one who sees
something wrong with this picture?
As I write this our national debt is just over $8.3 trillion and growing. I
recently read that the Congressional Budget Committee is projecting to add
another 3 trillion in debt over the next five years, which is probably a low-
ball estimate. In 2005 we paid $352 billion just in interest on the debt, the
second largest item in the budget after defense. In comparison we spent
$15 billion on NASA, $61 billion on Education and $56 billion on
Transportation.
Most of this shamefully large debt can be blamed squarely on the Reagan
Republicans. In fact Ronald Reagan, by coupling large tax cuts with large
increases in military spending, could be considered the father of runaway
deficit spending. All of the administrations before him had accumulated a
debt of about $1 trillion and he more than tripled it under his tenure. Then
the more moderate (and more sensible) Bush the First took over and
started working on reining in the deficits, even though reneging on his “no
new taxes” pledge might have cost him re-election. President Clinton
continued the work, actually bringing us close to a balanced budget by the
end of his second term.
Then Bush the Second came along and took us back to the Reagan model
of economic policy, which is basically to mortgage our children’s future for
short-term political gain. And now the conservatives even have control of
both houses of Congress, so there’s nobody to blame but them. It’s
comparable to a person who lives above their means by using credit cards.
It might take years, but at some point their debt will get so large that they
can’t even make the minimum payments on all their cards and still pay their
other obligations. At what point will the national debt become so large that
even paying the interest becomes too crushing a burden? If our
government ever defaulted on its debt our economy would fall into ruins. I
don’t think anybody can call this a fiscally conservative policy with a straight
face.
The alleged conservatives do manage to keep a straight face when they
claim that their tax cuts will stimulate the economy, thereby bringing in more
tax money. But those claims are based only on wishes and hopes. Nobody
can accurately predict what the economy will do next year or the year after
and tax cuts are certainly no guarantee of growth. You don’t spend money
like crazy because you’re hoping to make more money a couple of years
down the line. And if the wish does come true and the deficits start
shrinking they’ll just want more tax cuts and we’ll be right back to piling up
the debt.
What really irks me is that most of the tax cut money goes into the pockets
of the richest Americans. Conservatives would argue that that’s because
they pay most of the taxes, which is true. But the reason they pay most of
the taxes is because they take in most of the money. The GOP seems to
believe that you grow the economy by feeding rich investors more money.
Actually, investing in the stock market helps the economy as much as
reading the AP poll helps decide the college football champ. I’ve heard of
companies who see the value of their stock rise after “streamlining” by
getting rid of workers or even entire divisions.
It’s not investors but consumer spending that is the fuel that runs our
economic engine. That’s why I would argue that a better way to stimulate
the economy would be increase the minimum wage. Say you have a small
town and a million dollars to distribute among the population in an attempt
to help the town’s struggling economy. Would it be more effective to give
$100,000 each to ten of the town’s richest people, who can already afford
to buy whatever they want, or $100 each to 10,000 of the town’s poorer
folks who struggle by from paycheck to paycheck? You give the money to
the second group and most of it’s going to be in the hands of the town’s
merchants almost immediately.
By raising the minimum wage we put a little more money into the hands of
millions of people who will spend it immediately on goods and services.
Even better, the money doesn’t come out of the government’s coffers, it
comes from the businesses who will make it back because their customers
have a little more money to spend. In fact, the government would
immediately take in more money because of the withholding taxes on the
higher wages. Of course that will never happen as long as we’re saddled
with an administration and Congress that’s so beholden to their corporate
masters.
Personally, I’ve always registered as an Independent (they call it non-
political in my state, but I don’t think that’s a very accurate description) but I
usually find myself siding with the Democrats. They are often inept and
sometimes corrupt, but the Republicans are downright evil. I don’t want to
overdo the rhetoric, but if they were a houseguest they’d be running up
bills in my name, trashing the yard and starting fights with all the
neighbors. If that’s not evil it’s pretty close.
What really gets me, though, is their claim that they are conservative, at
least in respect to their cut-taxes-and-spend policies. I consider myself to
be a social liberal and a fiscal conservative. President Bush is a social
conservative and fiscally irresponsible.
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