As usual, we are coming up on a bunch of deadlines for the government. We have the problem of not yet having a budget for this fiscal year. We have the looming debt ceiling deadline. We have the National Highway Fund about to run out of money. And there are others.
The budget and the debt ceiling are the most critical of these deadlines. Republicans are always trying to place restrictions on both, and another government shutdown is looming, as early as November 5. That is when the Treasury Department says we won’t be able to pay our bills without raising the debt ceiling.
Unfortunately, this all comes together with an election year. Maybe that will be a good thing since Republicans who are hoping to hold on to the Senate and gain the White House won’t be stupid enough to cause a shutdown or default on our loans. But, with all of the crazies in their party, anything can happen.
Which also brings us to the current crop of Presidential hopefuls on the Republican side of the aisle. I bring this up now, because it is time to prove to the American People that their economic plans for this country are based on fairy dust and voodoo.
First there is Jeb Bush who claims that his massive tax cuts for the wealthy will result in a 4% GDP growth rate forever. Then there is Mike Huckabee who claims he will bring about a whopping 6% GDP growth. We have Rand Paul with his massive tax cuts claiming the economy will grow significantly enough to balance the budget in five years. And, Marco Rubio claims he will balance the budget in ten years.
You only need to look at recent history to prove these claims are bogus. It began with the so-called “golden years” of Reaganomics. Ronald Reagan promised massive tax cuts, especially for the wealthy, and promised that there would be so many jobs created, wealth would “trickle-down” to us poor working slobs. It didn’t work. He actually had to increase taxes later because of a massive recession.
George H. W. Bush tried the same economic plan to boost his Presidency. He even promised “read my lips. No new taxes.” Oops! He had to raise taxes again which led to his defeat to Bill Clinton. Then we have George W. Bush who inherited a balanced budget. There was even a surplus after Bill Clinton’s terms in office.
It didn’t take George W. to shrink that surplus and create a massive deficit. He immediately cut taxes, again mostly on the wealthy, and spent like there was no tomorrow. Even when he started two wars, he refused to raise taxes to pay for them. As a result, the deficit ballooned.
See, the problem with tax cuts is that it starves the federal government of money. The debt ceiling needs to be raised every year to keep up with the deficits and debt that these Republican Presidents laid on us. It is impossible, mathematically, to cut revenues and increase spending. Yet, Republicans always seem to find a way to raise Defense Spending.
Each of the plans proposed by the candidates I mentioned above will cut revenues between $5 Trillion and $10 Trillion in the next 10 years! In the meantime, Congress has already passed a massive Defense Spending Bill that raises Defense budget significantly. How do you pay for such a massive increase in Defense Spending if you plan to cut revenues?
Well, Carly Fiorina seems to have the answer. She claims she will introduce a budget that is Zero Based! That is a budget process that sometimes works for corporations, but it was tried once for the federal government and failed miserably.
If you are unaware of how a Zero Based Budget works, let me explain it simply. At the start of each fiscal year, every department must put together a budget where all the money is spent. You must also prove that you need every dollar you are asking to get. This takes months of planning. I know, I had to follow it during my time in the Coast Guard. It was a nightmare.
The other drawback to Zero Based Budgets is that at the end of the fiscal year, departments often find themselves with a little extra money. They then go on a spending spree because if you don’t use all of the money you asked for at the beginning of the year, you lose that money in the next fiscal year.
All of the Republican candidates talk about eliminating the Estate Tax. They call this the “death penalty tax.” You may think this is a good idea. You don’t want to have to pay taxes on your parent’s estate. But, you already don’t pay taxes on the estate unless it is worth more than $1 million. There is an exemption up to $1 million on this tax.
So, the only people who will really gain by the elimination of the Estate Tax are the wealthy. Surprise, surprise! The elimination of this tax simply means that rich people will be able to pass on all of their wealth to their children without them having to pay any taxes on it.
I find it ironic that many Social Security recipients must pay federal and state income taxes on their Social Security income. Yet, Republicans want the extremely wealthy to leave billions of dollars to children without having to pay a dime in taxes on it. Remember, the main principle behind the Estate Tax was to keep America from getting its own aristocracy. Republicans seem to want that aristocracy.
They desire to let certain young people gain millions or billions of dollars they did not earn, yet want to cut welfare, SNAP, Social Security, and Medicare. The people who depend on that money just to survive are called “takers” by Republicans. The rich brats who are gaining their wealth by doing nothing don’t seem to be classified as “takers” by the Republicans. Why is that?
This really boils down to simple arithmetic. You cannot cut revenues to the coffers of the federal government while expanding spending on things like defense and expect the deficit to go down! It is impossible! There are simply not enough “cuts” to other programs to offset this negative arithmetic.
Republicans claim they are the party of business. If that is true, it is a wonder that any business survives in this country. If businesses followed Republican policies, they would all go bankrupt! Another fact. There has been more economic growth in America under Bill Clinton and Barak Obama than any Republican President. The worst recessions of the last half century and beginning of this century were all under Republican Presidents.
Democrats have a better record growing our economy probably because they understand that you cannot balance a budget if you cut revenues. Republicans on the other hand don’t get simple arithmetic. That is why they have been so bad for our economy for over 50 years!
The current crop of Republican candidates want you to follow the same disastrous policies of their predecessors. It is simple. Cut revenues. Increase select spending. Balloon the deficit. They call that smart economics. I call it stupid!