The problem is that the assumptions, the driving underlying platforms of each wing of GOP are both wrong. Provably wrong! Trump aligned: QAnon, God is Republican, the many militia formed around White Supremacy, “deep state” doctrines and notion of a secret liberal cabal hell-bent on turning the nation into a socialist welfare state. Lincoln Project aligned (never Trumpers): Supply side economics is gospel. The Trump aligned faction, which is about to refuse to convict a pretty clear and well-documented incitement to insurrection led by Trump, is so predicated on false narratives – the only way to accept theories is to believe them as one would blindly believe a distorted religious cult – that it is hardly necessary to refute their assumptions. Further, their rejecting facts as part of the liberal conspiracy leaves no way to convince these believers that they are wrong.
But the vastly more logical and traditional wing of the GOP, drawing very little attention from the media these days – are fiscal policies truly that boring? – focused on those GOP “orthodox” basics, is equally wrong. Clearly the argument against big deficits turns a hypocritical eye in light of (i) the wasted GOP initiated post-9/11/01 wars of revenge and to stop non-existent weapons of mass destruction that took a Clinton era budget surplus into a continuum of massive deficits from the longest wars in our history and (ii) the further trillions of additional dollars from the GOP’s 2017 massive corporate tax cut that did not generate any offsetting tax revenues from greater earnings from the new jobs that never materialized. Republicans then retreated to their deficit hawk mentality, reeling from the deficits they created with the tax cut plus an unyielding pattern of increasing military allocations, and demanded a curtailment of social programs and, most recently, a reduction of the Biden COVID stimulus bill by two thirds. Didn’t happen.
You can go back to my November 29, 2017 The Deep Dark Republican Hole blog which addressed and predicted what a deficit-building failure the then new corporate tax cut was going to be based on America’s long history uninterrupted failure to generate economic and job growth through big tax cuts favoring the rich. Turned out dead on. Most of those wealthy folks got rich by being smart. Give them money and they don’t instantly go on a hiring binge. The 2017 tax cut may have generated a few dividends to shareholders, stimulated a few corporate mergers and acquisitions, and amplified the stock buyback business – especially with low interest rates – but it did not create those high paying new jobs… instead, it truly exploded our federal deficit with virtually no offsetting revenues. Of course, the stock market soared! Congress gave rich people more money to buy stock! And with lower corporate taxes, an additional motivation to invest in the market!
The problem with supply side economics is that it sounds so logical that despite no success in applying it to real life, it refuses to budge as the cornerstone of GOP fiscal doctrine. The notion of “tax cuts for the rich are good for us all” is repeated by fiscal conservatives even though it has been substantially and consistently discredited. It just sounds so good. If you believe that perhaps if supply side tax cuts were done right, well, they would work. Perhaps the United States just hasn’t done it right… yet. That would invite a skeptic to look around the world to see if that supply side theory has ever worked anywhere.
Michael Hiltzik, writing for the February 7th Los Angeles Times, spent some time scanning the relevant research, particularly a new study published by the London School of Economics run by David Hope of the LSE and Julian Limberg of King’s College London. That analysis examined tax cuts enacted by 18 developed countries, including the U.S., over the 50-year span from 1965 to 2015. The answer was simple: based on hard data, supply side economics never works. We already know the later 2017 US corporate tax cut held true to the continued failure of every measurable effort to implement those high bracket tax cuts. Anywhere. Everywhere!!!
Hiltzik: “[The study’s authors’] conclusion was that tax cuts for the rich succeeded in increasing the wealth of the top 1% and achieved absolutely nothing in terms of spurring growth or reducing unemployment… ‘The effect size of major tax cuts for the rich on real GDP [gross domestic product] per capita is close to zero and statistically insignificant,’ they write.
“The Hope-Limberg paper is especially important in the context of the COVID-19 pandemic. While the pandemic has damaged the financial health of middle- and working-class American families — and things would be much worse if not for the relief packages passed by Congress — it has affected the top 1% not at all.
“Indeed, as determined by Americans for Tax Fairness, the wealth of the nation’s billionaires has grown by more than one-third during the pandemic. That points to one way of funding further relief, including the $1.9 trillion in assistance proposed by President Biden [which passed with no GOP support]: Raise taxes on the wealthy. Indeed, Hope and Limberg proposed exactly that in mid-December.
“‘Given the damage the pandemic has done to economies,’ they wrote , ‘the notion of getting the most affluent to help foot the bill is one that has many supporters.... Higher taxes on the rich could help to fund the substantial and potentially long-lasting expansion of government spending and social protection seen during the pandemic. They could also help address health and economic inequalities, which have only been exacerbated by COVID-19 and its economic fallout.’” Republicans have never dealt with the fact that their sworn duty to cut taxes for the rich has never made the economy better for the rest of us.
I’m Peter Dekom, and I wonder how long a government can run when so many of its legislative representatives are addicted to fact-denial and adherence to thoroughly disproven mythology.
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