The College of Political Knowledge
Professor’s Classroom
Subject: Economics
Federal Budget Deficit Series
Paper #5
Tax cuts pay for themselves……tax cuts are budget neutral…..tax revenues will go up with tax cuts……Repubs have been selling this snake oil for decades. First of all….tax cuts DO NOT pay for themselves!
Since the days of Reagan and his “voodoo” economics, that is what Bush called his proposals, the GOP has been living and dying by the theories of supply side economics. Today is NO different. Just look at the GOP’s new “Road Map for America’s Future” and if you read it and understand it you will find it full of supply side issues.
But first what is supply side economics? Glad you asked and I will try to be a simple as possible for this theory. For decades the Repubs have been living and dying by the supply side theory….the problem is that it does NOT work the way they promise it will and yet the people buy it hook, line and sinker every time it is offered as an alternative.
I know….what the Hell is supply side economics?
It is fairly simple……government gives aid to business through reduced regs, tax write offs, subsidies and more government contracts…now to pay for these benefits the government will make higher taxes on the working poor, lower social security benefits, less job training, lower welfare benefits and less aid to education….the theory being that this will somehow “trickle down” to Main Street as better working conditions, higher pay and better benefits…….it has been supposedly trickling down since Reagan and so far it has NOT made it to Main Street that is still waiting with open arms.
RE-READ the above paragraph!
Now look at the Repubs new “Road Map” it is choke full of supply side rhetoric….and there you have it….the Repubs are still living and dying by the BS that is supply side economics…..
Lastly, Repubs keep saying jobs, jobs, jobs and that the extension of tax cuts will help small business create more and more jobs…..(thinking)……..we have tax cuts now and small business is NOT creating jobs……why would an extension help them do so?
Sorry about the length of this reply…
I’m sure you are right in your description of supply-side economics (as you say, it’s fairly simple). However, I realise this is just my opinion, but I personally think you’re wrong in some of your analysis…
Firstly, I believe that part of the problem throughout our democracies is that assumption that “reduced regs, tax write offs, subsidies etc.” are in any way shape or form some kind of give-away to anyone! I accept your premise that the distribution of these may be unfairly biased towards the wealthy in the US (I wouldn’t know) but to me, the government is simply STEALING LESS in these situations and about bloody time too!
Bullshit to the old communist (or is it another silly ideology?) idea that “all property is theft” – the truth is that ALL TAX IS THEFT and is illegal under any normal laws for normal people in ordinary walks of life. It’s no more nor less than a f*cking protection racket – just as pension and welfare is a giant Ponzi scheme!
Taxes may be a necessary evil, but so long as people accept the lie that the government is somehow “giving” when it reduces taxes, nothing will change. How does THAT work? It’s the people’s own goddamned money in the first place for chrissake!
Secondly, the reason tax cuts don’t help small business is that few of them are making any bloody profit in the current economic climate in order to pay tax anyway. What screws small business is BUREAUCRACY AND STUPID RED TAPE and THAT is deliberate! The cost of regulations, or even the cost of keeping up to date with the mountain of pointless sh*t that democratic administrations produce is horrendous for small business, but just a drop in the ocean to BIG business. Which is why it’s BIG business that draws up and advises government on the need for and terms of regulatory legislation – THEY can afford it and they know full well that SMALL business cannot – so they just squashed the competition before it even got started and they can then go ahead and do what they like because THEY designed the regs!
If you don’t believe me, look at the saga of the English E-Type Jaguar nearly half a century ago. When first introduced (and if I recall the mark 2 as well), it was one of the prettiest and sexiest sports cars ever produced anywhere in the world – and Americans WANTED them! The US car giants didn’t like that and wanted to make it less attractive so they could carry on selling the same old outdated sh*t they’d been doing fo years – so new legislation was hurriedly introduced that simply meant that the position of items like the headlights etc. on the Brit car were illegal in America whilst it already fitted with the American competition. Result: Jaguar had to redesign the their car and it looked CRAP by comparison with the original and was no longer the threat it had been to the US market.
THAT’S how big business manipulates government and thus the markets and only TRULY FREE market capitalism will stop it – IF, I repeat IF, the corporations face true (and if necessary manufactured) competition that FORCES them to offer the right deal to their customers. The banks right now are running what in my opinion pretty much amounts to a cartel and THAT is illegal. If some of the government’s (the PEOPLE’S) money that has been poured into this economic crisis had been used to set up a COMPETITIVE bank then the other banks would HAVE to fall into line – not convoluted Finreg and all that pointless and largely toothless crap that is full of loopholes for the big guys to drive their limosines through – just a competitor who would DO IT RIGHT (particularly for the small guy) resulting in increased employment and end of most of our problems!
Simple really…
Damn! I bet your fingers are tired…LOL It was an anarchist, Proudhome (?)…I believe……and I agree with p[arts of your analysis…..the way the GOP is phrase this thing is that it will help small business and create jobs…it will NOT….the tax cuts are in force now and look at the jobs it has not created…….another problem is that the corporations do NOT face competition…they silence any and all….look at insurance companies……..of course I believe that taxes are necessary….thge Jeffersonian democracy in the US would be in a sadder shape than now…..
Supply side economics is a convoluted theory that if put into practice helps only the top 5% at best…..the rest of the business cycle gets screwed and screwed hard….
BTW, I love the old XK-E and a couple of years ago Chrysler came out with a similar model called the Crossfire….it did not do so well….and I believe it has been discontinued….
Well, we agree on most of that.
On the subject of the E-Type was a child of its time but there are now firms stripping them down to a pile of parts and then rebuilding them properly rustproofed and with the addition of modern equipment like modern titanium or carbon fibre brakes or whatever etc.
Now THAT’S a car!
did you vote for obama? be honest
Yes I did….only because Kucinich was not on my ballot…..how’s that for honest?