Flying Pink Unicorns

There is a piece in today's WSJ which epitomizes why the GOP's views on economics are so out of touch with reality. Although there are a few interesting facts in here, the main thrust of this piece is:

1) Deficits don't matter;

2) We should cut taxes across the board;

3) These tax cuts would partially "pay for themselves"; and

4) The democrats have repudiated Rubin-omics-- caring about the deficit.

http://online.wsj.com/article/SB120035796472889887.html?mod=opinion_main_review_and_outlooks

Well, the US savings rate has plummeted in the last 25 years, and economists are VIRTUALLY UNITED that the main cause of this is THE BUDGET DEFICIT. That is an overwhelmingly accepted viewpoint.

Second, a brief history lesson.

Kennedy cut taxes and the economy boomed.

In the 70s inflation caused real tax INCREASES and the economy sputtered (not nearly as badly as you would think, growth and job creation was actually decent).

In the 80s Reagan first cut then RAISED taxes and the economy did well. I avoid saying boomed, b/c it didn't, but it did do well. Growth and job creation, though not as good as the roaring 90s, was good.

In the 90s Clinton RAISED taxes (mostly on the wealthy) and the economy boomed (yes, much better performance than the 1980s, from a higher base). Gingrich and company screamed recession. Clinton would DESTROY THE ECONOMY! Um, oops.

You'll never read these TRUTHS in the Wall Street Journal. Because these TRUTHS get in the way of ideology.

Finally, the article says Rubinomics RIP. Rubinomics was never distinct from a Keynesian view of demand management; of the government cutting taxes and/or raising spending TEMPORARILY in order to deal with a sudden shock to demand. The WSJ knows this perfectly well. But of course, lying about your opponents is S.O.P. for a Republican today. A sick, diseased dishonorable organization.

Ok, so this post was a bit of a rant, and a bit disorganized. You get the point. The GOP lies about matters money. Through its teeth. Constantly. In a big-ass way, not a small nit picky way. For the GOP to point to the democratic candidates calling for a stimulus as the end of a Rubinomics-deficit based fiscal policy is beyond belief. The democratic party has been the less fiscally irresponsible party since at least the late 1960s. Obviously this is a matter of opinion, but let's just say there's a HUGE wealth of information and facts to support my opinion.

As I always like to say, images are powerful things. And to some, the "image" of democrats as big taxers and big spenders, out of date for a long time, is still a powerful one. At least for lying to the people and winning elections.

It used to be REPUBLICANS that believed in taxing to pay for the government you choose to have. Not any more.

Last point before I shut up. We are at the absolute peak of the demographic cycle, literally this month. By that I mean that the ratio of highly productive (middle aged) to less productive (younger) workers is as high as it will get. Ditto the ratio of workers to retirees. Those ratios will get inexorably worse for the next umpteen years; at least 30. This is the HIGH POINT OF THE DEMOGRAPHIC cycle. Literally January 2008 is the high point; baby-boomers begin officially retiring this month. Even at war, we should, in a rational government, be running a MASSIVE surplus, say 4 or 5% of GDP. We should have been furiously paying down debt in the last 7 years, so as to be able to more easily borrow money to use to help cushion the inevitable changes to the social programs (social security, medicare (especially), medicaid) which will be necessary in the next 20 ish years. That we have not paid down a ton of the debt, as we started to under Clinton and the GOP congress in the late 1990s is a terrible self-inflicted wound, nicely indicative of the utter disdain with which the modern GOP holds our great country. If they gave 1/2 a rat's ass about America, they would have paid down a TON of debt, instead of running up a ton of debt. The modern GOP cares about enriching its friends and backers. Any benefit to the rest of us is completely incidental. What a sick, awful group of people.