Voodoo Economics Republican Style

Explaining tax cuts for the rich to a Republican

Mrs Woog is having trouble understanding the world around her. I would too - except I stopped trying some time ago and now just go with the flow.

I could - for example - spend some time wondering why Justin Bieber’s song ‘Baby’ is the most viewed video of all time on YouTube - or why Ford makes cars in Australia the color of baby poo - but there would be no point. It is beyond my comprehension.

WARNING: BORING POLITICAL CONTENT FOLLOWS

As you may be aware from my blog I am an avid follower of politics - and US politics in particular because they are the most visceral on the planet

(well - except of course for places like Mexico and Colombia and such places where politicians are regularly whacked by Drug Lords).

This is such an excellent idea that I am surprised it has not caught on elsewhere.

Anyway I read the International Herald Tribune every day plus a lot of news on line and I am endlessly fascinated by the crazy logic that politicians generally and the Republican Party in particular use to determine their whacky policies.

Paul Krugman in the IHT was telling the story about how the Republicans - and a few Democrats - have been kicking and biting and scratching to prevent the extension of unemployment benefits to the long term unemployed. This would cost $30 Billion and those against it are apparently quite happy to see the employed starve to death. Your government at work! Lose your job and die!

But......the unfunded Bush tax cuts for the rich are due to expire and the Republicans want them to be made permanent.

As Paul Krugman explains in the IHT

“For a while, leading Republicans posed as stern foes of federal red ink. Two weeks ago, in the official G.O.P. response to President Obama’s weekly radio address, Senator Saxby Chambliss devoted his entire time to the evils of government debt, “one of the most dangerous threats confronting America today.” He went on, “At some point we have to say ‘enough is enough.’ ”

But this past Monday Jon Kyl of Arizona, the second-ranking Republican in the Senate, was asked the obvious question: if deficits are so worrisome, what about the budgetary cost of extending the Bush tax cuts for the wealthy, which the Obama administration wants to let expire but Republicans want to make permanent? What should replace $650 billion or more in lost revenue over the next decade?

His answer was breathtaking: “You do need to offset the cost of increased spending. And that’s what Republicans object to. But you should never have to offset the cost of a deliberate decision to reduce tax rates on Americans.” So $30 billion in aid to the unemployed is unaffordable, but 20 times that much in tax cuts for the rich doesn’t count.

The next day, Mitch McConnell, the Senate minority leader, confirmed that Mr. Kyl was giving the official party line: “There’s no evidence whatsoever that the Bush tax cuts actually diminished revenue. They increased revenue, because of the vibrancy of these tax cuts in the economy. So I think what Senator Kyl was expressing was the view of virtually every Republican on that subject.”

Now there are many things one could call the Bush economy, an economy that, even before recession struck, was characterized by sluggish job growth and stagnant family incomes; “vibrant” isn’t one of them. But the real news here is the confirmation that Republicans remain committed to deep voodoo, the claim that cutting taxes actually increases revenues.

It’s not true, of course. Ronald Reagan said that his tax cuts would reduce deficits, then presided over a near-tripling of federal debt. When Bill Clinton raised taxes on top incomes, conservatives predicted economic disaster; what actually followed was an economic boom and a remarkable swing from budget deficit to surplus. Then the Bush tax cuts came along, helping turn that surplus into a persistent deficit, even before the crash.

But we’re talking about voodoo economics here, so perhaps it’s not surprising that belief in the magical powers of tax cuts is a zombie doctrine: no matter how many times you kill it with facts, it just keeps coming back. And despite repeated failure in practice, it is, more than ever, the official view of the G.O.P.”

This is fabulous stuff - the Republicans STILL believe after Reagan and others proved it not so - that tax cuts increase revenues. There are probably even still ‘flat taxers’ out there somewhere.

This to me is what makes America such a fascinating country and why politics everywhere is so interesting to watch.

People and politicians across the globe develop beliefs in things without evidence - but here we have Republicans that believe in something DESPITE the evidence.

But.... politics is one of the few jobs in the world that you can undertake without any qualifications or experience whatsoever - and it actually doesn’t matter if you are barking mad.

It’s glorious stuff and it really makes the ‘Muddled Headed Wombat’ seem like a very normal bushland animal indeed.