I talked to a good friend last week. Unlike me, he is a stalwart Republican, and like all stalwart Republicans he complained that President Obama is over spending and increasing the national debt. Now, Federal spending is far too high. There are several departments that could be disbanded completely and would never be missed. The Department of Education is a prime example. In addition we could definitely spend more wisely in the Defense Department. Health and Human Services is a continual problem, and let’s not even talk about the Government Accounting Office unless you want to spend the weekend in Vegas at tax payers expense.
But before we start blaming President Obama for these problems, let’s remember the Trickle Down Effect. Recall President Reagan if you can? You know, that wonderfully, folksy president from California. The man who came into office touting Reaganomics and cutting government spending and fiscal responsibility. I know, I’m aging myself by bringing him up, and I know that he ended the Cold War by forcing the Soviets into an arms race they couldn’t afford. He also raised the national debt by 168 % while in office. Actually, President Reagan spent more money than all the previous presidents combined, and that’s a lof of moola. (Sorry, aging myself again.)
President Reagan told us that the way to revive the economy was to cut taxes for the wealthy, and that they would then pump money into the economy and create a trickle down effect. The trickle would open factories and create jobs for the masses. There would be greater employment and prosperity would be just around the corner.
For a time that is what happened, but mostly from the money the government borrowed and funneled into the economy to build up the armed forces. What the general public missed was that Reagan’s tax plan ensured that the government couldn’t pay its bills while the increased defense spending ensured the debt would rise, and rise it did. Reagan’s answer for this was: “Deficits don’t matter.” They do matter and by the end of his presidency unemployment was up again, and we were heading for another recession. Final tabulation is that Reagan increased the national debt by 168%.. So much for fiscal responsibility.
Next came Bush Sr. under whom the national debt rose by 49%. Not too bad. The man who promised ”no new taxes” increased the national debt by nearly half in just four years. President Clinton followed Bush Sr. and after eight years he had increased the national debt by 22%. Now raising the debt by more than a fifth is not a great accomplishment, but after Clinton’s eighth year, we had a three hundred billion dollar surplus and were at last beginning to reduce the debt.
Much to the delight of the stalwart Republicans, George Bush Jr. was elected in 2000 promising a lot of what President Reagan had promised - a tax cut and the famous trickle down effect for the common working Joe and Josephine. I distinctly remember Al Gore explaining that Bush’s tax cut would amount to three hundred dollars for the average wage earning American. That’s right, only three hundred dollars, but much more for wealthy Americans. You know, the rich were going to spend so much, invest so much, that the economy would boom and there would be full employment in this land of milk and honey.
What many voters have forgotten is that many millionaires came out against the tax cut. They thought it would prove disastrous for the economy. It has proven so. If you don’t think so, then look at the current debt and tax structure of this country. Warren Buffet, a billionaire, has stated repeatedly, that it’s wrong that he pays a lower percentage of his income in taxes than the vast majority of his employees.
Not satisfied, Bush cut taxes again, started a sinful war in Iraq, retaliated against Bin Laden in Afghanistan, and raised Medicare benefits while never providing a means to pay for any of it. Borrowing from President Reagan, Bush and Cheney repeatedly told us that ”Deficits don’t matter.” They do matter, and they matter very much. Right now, more than half of every tax dollar you pay goes for the interest on the debt, and the interest alone. And more than half of every tax dollar you pay, makes the Chinese richer.
And while Bush Jr. was making these tax cuts and spending increases, where were these stalwarts of fiscal responsibility, Boehner and McConnell? I’ll tell you where they were, in the House of Representatives and the United States Senate. Where were the Republican cries for fiscal responsibility then? Why didn’t Mit step forward from Massachusetts and talk about spending decreases and getting back to reducing the budget as President Clinton had been doing?
Funny, the leading congressional Republicans and private citizens were quiet while Bush increased the debt by 75%. Now, thirty-two years after fiscal irresponsibility came to Washington, the Republicans are suddenly worried about the national debt.
I am too. Since Barrack Obama became president our debt has risen by 37.6 %. That’s a far better job that Reagan or either Bush did. Instead of castigating him, Mit and the gold old boys in Congress should pat him on the back and tell him: “A much better job.” Then they should pass the tax structure that President Obama wants. One that shows fiscal responsibility and begins again to whittle down the debt. All that is lacking for passage is Republican cooperation.
Trickle down effect, President Reagan and President Bush? I don’t think so. In thirty-two years, I haven’t felt a drop.