Friday, March 4, 2011

Fuzzy Logic

If we are to believe Congressional Republicans, their three largest concerns are the same as held by the "public" as supposedly expressed via the overwhelming victory by Republicans and Tea Party candidates. These concerns are: 1) The Debt. 2) Unemployment. 3) Shrinking Government.

Being that the Republican Party is the "fiscally responsible" party, it logically follows that the American voters went that way in order to alleviate their main concerns.

Or so conventional "wisdom" has maintained since November. However, as so often happens with the American electorate, they've been bamboozled into believing the opposite of what is true.

Take the GOP-as-fiscally-responsible-party clich̩. Bogus! In the period between 1978 Р2009 the Republican Administrations have outspent by a third and added debt at a rate nine times that of the Democrat Administrations. Yet, America believes, without a doubt, that the GOP is the fiscally responsible party.

Conservative icon Ronald Reagan was a cheerleader for "Supplyside Economics" (characterized by his own Vice President as "voodoo economics") which maintained that cutting taxes on the wealthy and spending taxpayer money on givebacks to big business would manifest itself manyfold times in the pockets of middle class Americans by way of "trickle down." There would be jobs a-plenty and it would forever be "Morning in America."

Middle class Americans have been paying the price ever since for such fuzzy logic. Their incomes (adjusted for inflation) have not grown for thirty years, jobs have vanished at an alarming rate and consequently unemployment has grown to just under 10 percent (20 percent if you count those discouraged from looking for jobs that aren't there).

As demonstrated by the "official" Republican response to the latest Presidential State of the Union address, Paul Ryan (R-WI) put forth the "new" Republican program: Repeal the Health Care Reform Act. Raise taxes on those making between $20,000 and $200,000 while cutting by half the taxes of those making more than $200,000. Raise the retirement age to 70 years old and cut Social Security benefits. Deregulate for increased growth. Cut the Corporate tax rate.

New? Let's examine the proposals more closely:

  • Are we to believe Ryan doesn't know that 2/3 of our corporations don't pay any income taxes? As clearly shown, the typical scenario is something like this: During a three year period (2001-2003) just 275 of the Fortune 500 corporations earned $1.1 Trillion (which should have resulted in $370 Billion coming into the US Government coffers) but only reported $557 Billion to the IRS. "Instead of a 35 percent tax rate, the companies as a group paid a three-year effective tax rate of only 18.4 percent." To make matters worse, these companies garnered "$175.2 Billion in tax breaks over the three years." Therefore, our Corporate neighbors stiffed the American People $345 Billion. That's a trillion every 3 years for 30 years. Pretty much our current debt load.

  • Deregulation? Deregulation greased the skids for the worst financial disaster since the Great Depression even as it made conditions ripe for the BP Deepwater Horizon oil spill debacle.

  • The Republican/Tea Partiers demand cutting Social Security, already too meager to live on, rather than requiring all income over $106,800 be taxed at the same rate workers' income is withheld, which would fully fund Social Security.
  • By raising the retirement age, Americans will be required to work until 70 years old. Along with Tea Party calls for diminishment of the Minimum Wage, Americans should be ready to work for poverty wages all their life until death.
  • Cutting taxes for the wealthy has been an ongoing crusade by Republicans since Reagan. The premise is that such tax reduction stimulates the economy and produces jobs. Americans should be wondering: When will those jobs finally materialize? After all, it's been thirty years and there still aren't employment opportunities for all that want a decent job with benefits and a living wage. Of course, the b part of this strategy is to raise taxes on the middle class.
  • Repealing the Healthcare Reform Act. Even though the Congressional Budget Office crunched the numbers and said repeal would add an additional $230 Billion to the debt, Republican Speaker of the House, John Boehner (R-OH), dismisses such a figure as "just their opinion." Understand that the CBO has been the official nonpartisan number cruncher of record since its inception in 1974, with both parties adhering to the facts as provided by the CBO. Now the Repubs and Tea Partiers simply dismiss any such limitations of reality and factual information by claiming it's mere opinion. And just what does Paul Krugman, Nobel Prize winner in economics have to say about this? "We are, I believe, witnessing something new in American politics. Last year, looking at claims that we can cut taxes, avoid cuts to any popular program and still balance the budget, I observed that Republicans seemed to have lost interest in the war on terror and shifted focus to the war on arithmetic. But now the G.O.P. has moved on to an even bigger project: the war on logic." Krugman goes on to dismantle the GOP arguments as so many "three-card monte tricks" and "childish logical fallacies." He further maintains the Repubs' obsession with repeal is due to one single factor – coverage for the uninsured. Why? "…the modern G.O.P. has been taken over by an ideology in which the suffering of the unfortunate isn't a proper concern of government, and alleviating that suffering at taxpayer expense is immoral, never mind how little it costs."

So, there you have it. The "new" Republican/Tea Party coalition plans on doing what the old-guard has been doing since 1980: Increase the debt. Increase taxes on middle class. Decrease taxes on the wealthy and corporations. Dismantle government "entitlement" programs for the People while enhancing the "entitlement" programs for corporate America/Big Business at taxpayer expense.

As for the claim that the wealthiest few percent pay the lion's share of income taxes, since our system of taxation is based upon value (income/net wealth) of course those holding the lion's share of income and net wealth will pay larger portions of the revenue total. But, as we've seen, trillions of dollars that should have been coming into governmental coffers have never arrived even as the tax rates have been steadily reduced for corporations and the wealthiest few percent. Corporations paid 25 percent of federal outlays in the 1950s, now they contribute but 7 percent of the revenue collected.

And, further, as jobs are concerned, how is it that Americans do not see the stark disconnect between Republican rhetoric and the reality of a capitalist society? Capitalists are afforded all sorts of tax breaks to create jobs yet whenever there's an unemployment problem, the People scream at government? Why? It is the private sector's responsibility to create the jobs necessary for prosperity. That is why it receives all those tax breaks.

Grover Norquist, Republican activist and former speech writer for the U.S. Chamber of Commerce, clearly articulated the plan for shrinking government: Republicans "…simply want to reduce it to the size where (we) can drag it into the bathroom and drown it in the bathtub."

Save government by killing it? Fuzzy logic.