Sunday, April 30, 2017

Fifth Generation Reaganomics

First there was President Ronald Reagan's 1981 supply-side economic program . . . cut domestic spending, cut taxes on the rich, let them invest money in factories, and more people will join the workforce and contribute to the tax base.  In other words, tax work instead of wealth.  Reagan economics - called, henceforth, "Reaganomics" - worked, at least in the short term, but not the way Reagan, Arthur Laffer, Jude Wanninski, and other economic conservatives envisioned.  The rich people invested their tax cuts in themselves, and most of the jobs created in Reagan's eight years - which lowered the employment rate from 7.4 percent in February 1981 to 5.4 percent in January 1989, making Reagan the only Republican President since World War II to leave office with the unemployment rate lower than what it was when he entered office - were low-wage jobs that no one could reasonably expect to make a living from.
The tax cuts blew up the deficit and caused a recession, forcing tax increases in 1990 under the senior George Bush and another tax increase under Bill Clinton in 1993.  With the passage of a budget that year that increased domestic spending, then-House Speaker Tom Foley, a Democrat from Washington State, said we had come to the end of Ronald Reagan.
Ironically, he lost his House seat in the Gingrich revolution of 1994 that gave us a Republican Congress and Reaganomics Mark Two.  Only President Clinton's firm stand on deep spending cuts, plus a 1995 government shutdown that neutralized Speaker Newt Gingrich, prevented another deficit; in fact, with many tax hikes still in place and with measured spending cuts to boot, a budget surplus was generated.  Not to mention decent jobs.   
Then came the third iteration of Reaganomics with George Walker Bush and his 2001 and 2003 tax cuts, blowing the surplus and putting the country deeper in debt and leading to the loss of good jobs that, quite frankly were lost for good.  And military spending went way up thanks to not one but two wars in the Middle East.  And then came the 2008 financial crisis.
Barack Obama then came into office with a Democratic Congress in 2009, with many Americans thinking we'd seen the last of Reaganomics. Fourth generation!  The Tea Party came into power in Washington in 2011 and brought it back.  More jobs lost, more tax breaks for wealthy people.
Now Donald Trump is the White House with a Republican Congress, and his tax reform proposal is essentially Reaganomics Mark Five - Reaganomics on steroids.  I won't go into the detail, because, quite frankly, neither has Trump.  The proposal - which would pretty much give corporations a huge tax break - only takes up one page of a ream of paper. 
We've seen this movie before.  And not only does it keep getting worse, the celluloid is wearing very thin.

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