Grover Norquist, one of the darlings of the extreme rightwing, Gingrich/Bush/McCain branch of the Republican party, once said, "I don't want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub." This statement has been the basis of Republican policy. Norquist went into more detail:
"Cutting the government in half in one generation is both an ambitious and reasonable goal," Norquist stated in May 2000. "If we work hard we will accomplish this and more by 2025. Then the conservative movement can set a new goal. I have a recommendation: To cut government in half again by 2050"
The idea is to starve government of revenue it might use for programs like Medicare, social security and any program outside of "defense." Corporations would do the rest.
Norquist knows this is not something that can be done overnight, hence the milestone dates he's set of 2025 and 2050. But this is why we have this constant insistance on tax cuts by the republicans:
"Sure. But first of all, it’s not clear that that would add trillions to the deficit, because I really believe that if we expand the base of the economy, which we could do by selectively lowering some taxes, you have a broader base on which to apply the tax."
Pat Toomey, Republican Senator elect. Toomey knows this is hogwash. You don't increase revenue by cutting taxes. During the 80s when Reagan did it, revenue went down. So did job creation. During the 90s when Clinton increased taxes, revenue went up and so did job creation. When Bush cut taxes to record levels, we ended up with this new Great Recession. (Click the chart graphic to enlarge to see the comparison)
Cheney was asked about this once, i.e. how do you reconcile the record deficits under the Bush/Cheney administration, with republican policies that espouse fiscal conservatism. Cheney told him, "deficits don't matter."
Of course, they don't matter when republicans are in control because their overall goal is to get to a point where they can "drown government in a bathtub." And they always make sure to leave a deficit for incoming democratic administrations, so they can do as they are now and claim a refound fondness for fiscal conservatism and demand spending be cut -- so money cannot be spent on the things they want to cut, as part of drowning government. This includes things like extending unemployment benefits.
Senate Minority Leader Mitch McConnell also stated, "There's no evidence whatsoever that the Bush tax cuts actually diminished revenue."
Toomey and McConnell are pushing the debunked trickle down economic theory. The reality is the Bush tax cuts created less revenue growth than the Reagan or Clinton administrations.
David Stockman was Ronald Reagan's former director of the Office of Management and Budget. In an interview, Stockman told journalist William Greider that trickle down economics was rebranded supply-side economics. It is hard to sell to the middle class and poor people that tax cuts for the rich will "trickle" down to them.
"It's kind of hard to sell 'trickle down,' so the supply-side formula was the only way to get a tax policy that was really 'trickle down.' Supply-side is 'trickle-down' theory."
In another interview, Stockman said Reagan intentionally used trickle down economics and increased spending as part of his plan to cut New Deal and Great Society programs he loathed.
Back in 1981 David Stockman was the wonderkid of the Reagan administration–the director of the Office of Management and Budget who’d craft in actual budgets the trickle-down miracle Reagan had promised on the campaign trail: lower budgets, lower spending, higher tax revenue. But trickle-down economics was a wish, not a reality. It’s never worked. Lower taxes don’t generate more revenue. They generate deficits.
Reagan knew it. So did Stockman. So did their guru, Friederich von Hayek. The deficits were intentional all along. They were designed to “starve the beast,” meaning intentionally cut revenue as a way of pressuring Congress to cut the New Deal programs Reagan wanted to demolish. “The plan,” Stockman told Sen. Daniel Patrick Moynihan at the time, ” was to have a strategic deficit that would give you an argument for cutting back the programs that weren’t desired. It got out of hand.”
(And notice the very first thing Bush II did when he took office was to wipe out the surplus that Clinton had created in his 2001 tax cuts. The republican plan is to ALWAYS leave a deficit, becuase then it allows them to make the argument above.)
Reagan's mission was the same as Grover Norquist's drown government in a bathtub quote. Reagan and Norquist didn't really believe tax cuts would magically create surpluses.
The new generation of Tea Party Republicans coming up learned economics from talk radio, Republican stump speeches and the National Review. The new breed of Republican candidates are so economically stupid that they actually believe the big lie that is trickle down economics. Toomey has a background in banking. Toomey isn't stupid about economic policy. He is just as cynical as Reagan and Norquist.
And this is why, at some point, the lie that is trickle down economics has to be deflated. A perfect opportunity to do that was when the Bush Tax cuts were to expire. But instead, democrats cut a "deal" with republicans to extend them. In two years the political climate will be such that the call will be to make them permanent. Tax cuts do not increase revenue, their only purpose is to starve government of operating funds to create the kind of society that Norquist and other "conservative" extremists envision. There is no place for a middle class in that vision.
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Sunday, December 12th 2010 at 2:58PM
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