The House Republicans obviously don’t give a damn about the Havenots, the millions who are poor, hungry, or homeless. But that’s hardly news. Now they’ve set their sights on the so-called working class, although millions of Americans still lack jobs. To inflict further pain and suffering, the GOP intends to abolish federal agencies whose charges include ameliorating the plight of at-risk citizens and cleaning up an at-risk environment. The Republican mantra is as simple as it is insidious and benighted: keep lowering taxes and cutting budgets.
The Right will tell anyone and everyone that they’re all about fiscal responsibility. After all, they claim with tongue firmly embedded in cheek, governments should behave like prudent households: carry no debt and spend within your means. Since nearly every government at every level is running a deficit, the solution is to cut, cut, and cut some more. But by all means, don’t increase revenues.
And while we’re at it, the Republicans continue, let’s eliminate those programs that help our worst-off citizens survive. Slash their basic health plans. Gut unemployment benefits. Abolish welfare.
Yet, such draconian measures are not only heartless they’re also lousy economics.
A while back Moody’s produced a version of the this linked graph (bang-for-buck). It shows the multiplier effect of a dollar spent or un-taxed in selected ways.
McClatchy News, one of the few papers to expose the inanity of Bush’s Iraq adventure, has published a report of states’ efforts to reduce taxes, ostensibly to stimulate their economies. It hasn’t worked.
Their willingness to forgo needed tax revenue is hard to fathom, as states face a collective $125 billion budget shortfall for the coming fiscal year, said Jon Shure, the deputy director of the State Fiscal Project at the Center on Budget and Policy Priorities, a respected liberal research institute in Washington.
“To be cutting taxes when you’re short of revenue is like saying you could run faster if you cut off your foot,” Shure said.
The logic is not difficult to follow. By lowering tax rates during relatively robust economic times, states have incurred a double whammy during recessionary periods, as the costs of providing public services—supplied only by governments—rise while revenues decline.
“My argument to state lawmakers is that lower rates for everybody are better than tax incentives for some,” [Tax Foundation President Scott] Hodge said.
That incentive-free philosophy was behind Michigan Gov. Rick Snyder’s call for a flat 6 percent corporate income tax to replace the current business tax system. But Snyder’s flat tax amounts to a $1.5 billion tax cut for businesses, paid for in part by education cuts, personal income tax increases and taxing public and private pensions.
“We think that’s the way to rebuild our state, and to get it on a path toward economic prosperity,” Snyder’s top economic development official, Michael Finney, said during a recent trip to Washington.
History suggests otherwise, however. After the nation recovered from the 1990-91 recession, 43 states made sizable tax cuts from 1994 to 2001 as the economy surged. Twenty-eight states, in fact, reduced their unemployment insurance payroll taxes after 1995.
But states that cut taxes the most ended up with the largest budget shortfalls and higher job losses when the economy slowed again in 2001, according to research by the Center on Budget and Policy Priorities.
I submit that from a moral perspective, the suffering incurred by our least well-off can and should be blamed on those who wish to both cut taxes and squeeze government budgets. So, when you read about someone who has to forgo prescription drugs to treat a serious ailment, because of budget cuts, blame it on the Republicans. When you see long lines in front of a local food bank, blame them on the Republicans. If an elderly person is forced to eat cat food, blame it on the Republicans. Should you be encountering potholes in the roadways, blame them on the Republicans. When public school teachers are forced to live in trailer parks, blame this on the Republicans.
The GOP and the Tea Party may have done us a favor by revealing themselves as soulless bastards. Now it’s up to the rest of us to exploit the revelation in a concerted call for decency and sympathy. Yep, that means higher taxes on the rich and expanded public services.
Golly, that sounds so socialistic. Amen.