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Massachusetts Liberal

Observations on politics, the media and life in Massachusetts and beyond from the left side of the road.

Monday, October 15, 2012

Fool me once

There they go again. In the face of a 30-year record of deficits, Republican snake oil salesmen continue to peddle the discredited idea that cutting taxes will raise revenues.

Add in the fact the Romney-Ryan ticket is talking about back to the future responses in Syria and Libya and you have to wonder whether they think the nation is suffering collective amnesia about the realities of GOP presidencies since Saint Gipper.

The Boston Globe is the latest to take on and debunk the mathematically impossible GOP scheme known as supply side economics (and correctly labeled "voodoo economics by George Bush 41 in a moment of honesty).

Supply side was a novel concept when unveiled by the anti-tax crowd in the 1970s and embraced by Reagan. But a look at the bar chart offers a stark image of reality: tax cutters Reagan and George Bush 43 ballooned the national debt with a no-tax and spend policy that has left us staring at a fiscal cliff.

As the Globe notes:
A report by the Congressional Research Service last month examined the historical relationship between top marginal tax rates and economic growth going back to 1945 and found none. “Top tax rates appear to have little or no relation to the size of the economic pie,’’ according to the report.
In fact, there is at least one recent example where bumping the top rate -- higher -- triggered an economic boom.

A stimulus package proposed by Bill Clinton an approved without a single Republican vote, raised the top rate and triggered growth throughout the 1990s that, in the end, created a budget surplus for the first time in decades. That surplus was wiped out with passage of the Bush tax cuts which are the foundation of where we are today.

Yet Republicans continue to cling to the fallacy, tied to Grover Norquist's pledge to starve the beast,"and are intent to solve the problems they created by shredding the safety net they have largely opposed since Social Security and Medicare.

And it's not just "ancient history." Republicans voted by a 98 percent plurality for Paul Ryan's Medicare proposal that has been disavowed, for now, by Romney.

George Santayana was right:
"Those who cannot remember the past are condemned to repeat it."
 But Santayana never had to deal with billions in false advertising.

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Anonymous Anonymous said...

To say that Clinton raising rates triggered a boom, just as saying Bush's cuts led to recession is too simplistic. The economy is complex and many of FDR's remedies for the Depression are now dismissed by economists as actually retarding growth. Barack is saying the do nothing Congress is holding him back, future economists may point out this actually helped. In 2-3 years things will be booming again, tax rates may go a little higher and average people will think Barack solved things. Buried in the solution bill will be a deal to allow repatriation of profits and low tax rates on new dividends and all sorts of devilish deals that will help the rich and will widen the gap between rich and poor. But the results of this won't come to fruition until after Barack is out of office and then the next guy will be blamed.

October 16, 2012 5:03 AM  

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