Okay, this bothers me.
There’s two parts that make up the foundation of conservative economic policies. Tax cuts and eliminating deficits. (Conservatives allegedly support decreasing government spending, but every Republican president since Eisenhower has substantially increased federal spending.) Two policies that people often figure go hand and hand with one another. Except the problem is they don’t go hand and hand. In fact, the two are mutually exclusive.
Let me explain
Something republicans overlook, whether willingly or intentionally, is the fact that tax cuts cost money. Lots of money in fact. Look at President Bush’s 2001 tax cuts which cost $1.35 trillion or the tax cut portion of Obama’s stimulus bill which will cost $282 billion over two years. Where does this money come from? Fiat? The magic fairies that whisper sweet nothings into Rush Limbaugh’s ear every night? Nope, they come from government because tax cuts…*gasp* are just another form of government spending.
Of course, I’m not opposed to federal spending but as Republicans are quick to argue, federal spending should be revenue neutral. Meaning any future spending must be offset with cuts to the current budget. But as we saw during the last eight years, that logic only applies to things that democrats want. Between the massive subsidies to dirty energy companies, handouts to the pharmaceutical industry, and tax cuts for the wealthiest Americans, President Bush didn’t cut the federal budget at all. In fact he grew the government without cutting a single, net, dime. A practice SOME people might call “Voodoo Economics”.
Don’t get me wrong, there are other arguments one could make for supporting tax cuts. In 1981 and 2001, Reagan and Bush used the Laffer curve to argue that tax cuts pay for themselves. Now days people who support this argument. get laughed at and flunk economics:
If there’s one thing that Republican politicians agree on, it’s that slashing taxes brings the government more money.
If there’s one thing that economists agree on, it’s that these claims are false. We’re not talking just ivory-tower lefties. Virtually every economics Ph.D. who has worked in a prominent role in the Bush Administration acknowledges that the tax cuts enacted during the past six years have not paid for themselves–and were never intended to. Harvard professor Greg Mankiw, chairman of Bush’s Council of Economic Advisers from 2003 to 2005, even devotes a section of his best-selling economics textbook to debunking the claim that tax cuts increase revenues.
This article is important because it even quotes Arthur Laffer, creator of the Laffer curve, who mentions that this idea is bullshit when he says point blank “”The Laffer Curve should not be the reason you raise or lower taxes,””
Uhh, by the way LAWYERED.
At the end of the day, it appears as if the conservative argument for tax cuts is really a selfish moral argument. “Why should I have to give MY money to the federal government.” This of course overlooks the irony that red states that support tax cuts receive much more federal money (IE taxpayer dollars) than they send to Washington.
But whatevs. That’s the way the hedonistic culture of conservative economics works. If it sounds right, do it! Major banks go bankrupt? Fuck it, let them go under, economy be damned. Need to provide stimulus and job growth? Cut my taxes, who cares how much it costs or how effective it is.
And that, as they say is that.