Sunday, August 01, 2010

Honest GOoPers

It turns out that even Republican economists, two men heavily responsible for the current U.S. fiscal situation, believe it is time to let the deficit-creating Bush tax cuts, a non-progressive cut favoring the wealthy, expire. Former Federal Reserve Chairman Alan Greenspan, who drove the go-go aughts by not putting on the breaks with sub-prime lending, offered his late-to-the-party wisdom on Meet the Press:

Greenspan expressed his disagreement with the conservative argument that tax cuts essentially pay for themselves by generating revenue and productivity among recipients.

"They do not," said Greenspan.

"I'm very much in favor of tax cuts but not with borrowed money and the problem that we have gotten into in recent years is spending programs with borrowed money, tax cuts with borrowed money," he said. "And at the end of the day that proves disastrous. My view is I don't think we can play subtle policy here."

Ditto for David Stockman, director of the Office of Management and Budget under President Ronald Reagan, who wrote in a New York Times op-ed:

If there were such a thing as Chapter 11 for politicians, the Republican push to extend the unaffordable Bush tax cuts would amount to a bankruptcy filing. The nation’s public debt — if honestly reckoned to include municipal bonds and the $7 trillion of new deficits baked into the cake through 2015 — will soon reach $18 trillion. That’s a Greece-scale 120 percent of gross domestic product, and fairly screams out for austerity and sacrifice. It is therefore unseemly for the Senate minority leader, Mitch McConnell, to insist that the nation’s wealthiest taxpayers be spared even a three-percentage-point rate increase.

More fundamentally, Mr. McConnell’s stand puts the lie to the Republican pretense that its new monetarist and supply-side doctrines are rooted in its traditional financial philosophy. Republicans used to believe that prosperity depended upon the regular balancing of accounts — in government, in international trade, on the ledgers of central banks and in the financial affairs of private households and businesses, too. But the new catechism, as practiced by Republican policymakers for decades now, has amounted to little more than money printing and deficit finance — vulgar Keynesianism robed in the ideological vestments of the prosperous classes.

This approach has not simply made a mockery of traditional party ideals. It has also led to the serial financial bubbles and Wall Street depredations that have crippled our economy. More specifically, the new policy doctrines have caused four great deformations of the national economy, and modern Republicans have turned a blind eye to each one.

With Obama promising to keep the cuts for taxpayers earning $200k/yr or less -- and families earning $250k/yr or less, it's hardly a strike against most Americans.

But then again, maybe the GOP plan for winning is continual fiscal collapse?

No comments: