As the Republican candidates compete for the favor of the tea party, they say increasingly ridiculous things. I do not mean those occasional extreme-sounding remarks that gain media attention for a week and then fade from memory. What I am concerned about – what I believe we should all be concerned about – is the core parts of the Republican message for 2012 that make no sense whatsoever. Yet they are repeated again and again on television, on the Internet and in newspapers. It is time to challenge them.
1. “We need to balance the federal budget.”
OK, it is true that the federal government has been borrowing money for over 30 years, and is therefore in debt. This trend was started by Ronald Reagan, who first came up with the idea of cutting taxes and using borrowed money to replace the lost tax dollars. The only president since 1980 who did not run deficits every year was Bill Clinton. It is ironic the Republicans are now complaining about a problem mostly created by their own policies. Instead, let’s talk about how they want to start paying off the debt now, right in the middle of the worst economic crisis since the Great Depression. And since Republicans love to compare the government’s finances with those of an average American family, let’s run with that analogy.
Imagine you or your family steadily accumulated debt over the past 30 years. Then the great crash of 2008 hit, some guys from Wall Street said they were ruined and desperately needed your help, and you gave them the last of your savings. As the recession continued, you lost your job, had to drop out of college, couldn’t pay your medical bills and generally fell upon bad times. Now a guy comes along and says that this is the best moment to pay off all your loans. Huh? Shouldn’t you be paying off your loans when you are doing well and have money to spare, rather than when you’re broke? Struggling to pay your debt right now is only going to make it harder to get back on your feet, whether you are one person or the entire United States.
2. “Bailouts are bad, but tax cuts for corporations are good.”
Robert Barro recently wrote an op-ed piece for the New York Times where he argued first that bailouts do not work and have not helped the economy, and second that the real way to stimulate the economy is to cut corporate taxes so companies will have more money to invest and create jobs. This is a line of argument echoed by the vast majority of Republicans, including all presidential candidates. There’s just one problem. It is entirely self-contradictory. What does a bailout do? It gives corporations more money. What do corporate tax cuts do? They give corporations more money. As far as the receiving businesses are concerned, there is no difference between a bailout and a tax cut. So if getting money from the government isn’t making corporations invest more and create jobs, it makes no sense to say the solution is to cut their taxes so they have more money.
Sure, the companies benefiting the most from bailouts may not be the same as the companies benefiting the most from tax cuts, but the Republican argument is not that the bailout money went to the wrong businesses. The argument is that bailouts don’t work while tax cuts do. This isn’t just false, it is logically impossible. Either giving money to businesses stimulates the economy, or it doesn’t. And if it doesn’t, maybe we should consider using that money to help workers instead.
3. “Taxes are too high.”
This short sentence probably sums up the entire economic philosophy of the Republican Party at the moment, and it is downright bizarre. Taxes in the U.S. were higher from 1933 to 2002 (with the exception of four years in 1988 to 1992). Taxes on the richest top 1 percent of Americans went down in a particularly spectacular fashion after the 1970s. And, of course, the overall level of taxation in the US is significantly lower than in any other developed country. Western Europe, Canada, Japan, Australia, New Zealand – they all have higher tax revenue as a percentage of GDP than the United States. So, with taxes being lower than anywhere else in the Western world and lower than they used to be in the United States for most of the 20th century, how can anyone possibly claim that taxes are still too high? The most absurd argument of all is that these “high” taxes we have right now are discouraging businesses from investing and creating jobs. But somehow, there was no problem creating jobs when taxes were higher.
I would not mind if the Republicans simply came out and said they hate any and all taxes on principle, they believe the rich deserve more money and workers deserve less, or they wish to cut Medicare and Social Security because they don’t want those programs to exist in the first place. That would be honest. But honesty is not what’s important in the sound bite.
Mike Tudoreanu is a Collegian columnist. He can be reached at [email protected].
