As the 2008 presidential campaign season began in earnest, the Republican candidates all paid their tributes to Ronald Reagan. His was a myth writ large, with facts being buried beneath legend, and little critical voice given to the realities of his tenure. One debate was jokingly referred to as a séance, so often was his apparition summoned from the great beyond
Time has passed, though, and the times are more dire, and the Republicans are seeing their temporal grasp on power slipping once again from their fingers. With very little left in their bag of tricks, they are attempting to resurrect the language of the Reagan era. They are clinging to the talking points; this time, however, we have 25 years of evidence and the benefit of hindsight.
The centerpiece of Reagan's economic policy was referred to as "supply-side economics". Despite the scholarly title, the approach was simple: cut taxes and people will spend more, thus generating more tax revenue than would be lost by the tax cuts. When future-President George H.W. Bush ran against him in the primaries, he rightly referred to it as "voodoo economics", because it just didn't make sense. To add injury to insult, it was augmented with "trickle-down" economics, where excessive tax cuts for the rich were supposed to spur economic development as rich people pulled wads of cash out of their pockets and blessed us with a farthing by creating jobs just for the heck of it.
We know of course that none of this worked. After his tax cuts
, unemployment soared, the deficit tripled, and Reagan was forced to actually raise
taxes when he learned that his brilliant scheme to get elected was hurting the country economically. Today's Republicans are purposefully ignoring this evidence and continue to purport that cutting taxes will stimulate job growth and lower the deficit. The ghost of job losses past is rattling its chains, but the GOP is pretending it's not there.
The GOP's claim that taxes are too high bumps up against another reality. Current tax rates are lower than in the 80s when their icon Reagan was president, and lower than in the 90s when the economy was booming when Clinton was president. In fact, they're lower than they've been in a long, long time
. When President Obama pointed out the ghost of tax rates present, the Republicans rolled their eyes
. They don't want to face the reality that even with tax rates lower than their hero's, the economy and job market are still stagnant.
Where will this relentless tax cut madness lead? This graphic shows the impact that the Bush tax cuts had (and will have) on our deficits:
The tarp bailout (hated by Republicans and Tea Partiers), has had a negligable effect. The second biggest effect is from the economic downturn, and the biggest effect is the Bush tax cuts. Based on the previous evidence from their hero Ronald Reagan, the appropriate measure to take would be to raise taxes, thus lowering the deficit and stimulating the economy by providing more funds that the government MUST spend (as opposed to the money in the hands of the rich, which could simply end up in a tax-haven account in the Cayman Islands). Instead, the GOP is ignoring the ghost of deficits future, and once again turning a blind eye to the lessons learned by Reagan, and others that have paid attention since then.
Before the sun rises on a country in an economic graveyard, the GOP must heed the warnings from the ghosts of Reagan past, present, and future. Otherwise, we're in for a Dickens of a time.