Republican Fiscal Fiction Versus Reality
Who will save the economy? John McCain wants to put Bushenomics on steroids and has now adopted the decades old Republican (provably false...read on) rhetoric of Democratic fiscal irresponsibility and the lie of superior economic stewardship by Republican Administrations. What’s the real truth? How has it worked out for Americans EVERY time we’ve elected a Republican President during the past 40 years? And why is McCain trotting out such dusty attacks on Obama?
First, let’s get McCain’s 20 year rhetorical time-warp to the tired politics of elections past out of the way. The reason for the tactical shift is completely understandable: McCain has discovered that no matter how many times he closes his eyes and clicks his ruby slippers together saying "There's no place like Nam, there's no place like Nam" or screams "Obama!...Ayres! Terrorist BFFs!", Americans aren’t buying any of it. He's desperate.
So will American’s buy this latest tactical shift from Team McCain? Short answer: not a chance. The long answer requires a deeper look at why the American people have become so weary of Republican economic promises by examining the long term effects of Republican policy through the eyes of history from a temporal altitude several decades high.
Lets begin our journey in the present. What is the truth about John McCain’s latest economic proposal? Will it benefit the panicked masses? Or will it be just more of the same Bush giveaways to the super-wealthy and more Bushenomic spit in the eye of the little guy? Jared Bernstein (love Crunch) characterized McCain's plan in the following way:
"The good number crunchers at the Tax Policy Center examined who would benefit from the McCain proposal. The middle fifth of families end up with all of 0.2% of the benefits. That's not a typo. The tax break would lower their annual tax bill by $4.00. OK, that is a gallon of gas, but it's not what you'd call a game-changer. The top 20% end up with 98.3% of the benefits of the cut, and the top 1%, with income above $600,000 get 75% of the gains, for an average benefit of $37,600. The average tax savings for the top 0.1%--income above $3 mil--is $244,000."
So McCain plans to give $4 in tax relief to the Middle-Class and a $244, ooo to the über wealthy top o.1 percent!? Could that be right? Yep, you read that right. It’s obscene and it speaks volumes about where McCain’s true priorities lie in these troubled economic times. His plan is just more of the same old trickle-down flim-flam that has never worked. It's Bush times two. If you like what you've gotten over the past eight years, you'll just love an even bigger helping from a President McCain. If an economy in shambles isn't what you're after, well, read on...
I suppose it might be easier to stomach (and far less insulting one's intelligence) if the whole Republican idea of fiscal responsibility really did have a track record of delivering robust markets, a reduced national debt, balanced budgets and prosperity for all, but ...
Allow me to make my points graphically. Well start with an examination of market performance under Republican and Democratic Administrations over the past 80 years. Time spent in the Whit House has been split roughly equally over that time period with 40 years of Republican control and 40 years of Democratic control.
Lets have a look at what a $10,000 stock-market investment would've gotten you under the Republican administrations during their 40 years of control, and what that same $10,000 would have gotten you under Democratic administrations during their 40 yeas of White House control.
Whoa! Didn't see that one coming did you? It's not even close: Democratic Administrations would have turned your $10,000 into $300,000 and Republican administrations wouldn't even have kept pace with inflation over their four decades of control with a pitiful $1,733 in capital gains (and that's best case--with Hoover's disastrous administration left out). Bottom line, if you want to see your 401k grow, pray for a Democrat in the White House.
But what about revenue and spending? You know, fiscal responsibility. Who really is a better steward of Government finances? One political Party ALWAYS keeps Federal deficits, the National Debt, and spending under control, and one Party ALWAYS puts America deeper in the hole and more indebted to countries like Japan and China. Which is which? The answer might surprise you but the facts (from the far left folks at the U.S. dept of Treasury) are crystal clear.
Take a second and really soak in that graph. The Republican rhetoric sure doesn't match American fiscal reality at all, does it? Turns out Republicans over the past 40 or so years have always run the country like 12 year olds with a their parent's credit card, and Democrats have always kept the American financial house in order. If you don't want to leave your kids and grand kids an even bigger bill than Chimpy already has...Pray for a Democrat in the White House.
(Be sure to check out the chart below too, it really makes clear who consistently spends America into massive debt.)
OK, you say, so the Republicans always screw the pooch when it comes to market performance and fiscal responsibility, but what about their promises of prosperity for all? Surely they deliver on THAT perennial promise right? Once again...nope. The chart below shows the growing gap between the super-rich and the bottom 90% of Americans, a gap which has become increasingly pronounced under the Bush Administration's policies (the chart is from The Nation's June 30th issue The New Inequality...a must read issue for understanding the New Guilded Age. I'd also recommend Nobel Prize winner Paul Krugman's The Conscience of a Liberal).
at all, but through utilization tax-loopholes pay only 23%--even less than someone (maybe you) earning $32,550 - $78,850 (marginal rate 25%).
Doesn't sound much like "prosperity for all", now does it? It sounds like an unfair redistribution of wealth upward. Against all reason (he's workin' that extra-chromosome thing like a champ) McCain wants to continue, and even intensify the Bushenomic policies so that the already advantaged become even more advantaged and the other 80% of Americans are effectively told to get bent. McCain really is MORE OF THE SAME, and he is hoping against hope that you don't figure out that his new-found "Joe the Plumber" populist message is nothing more than...well..lipstick on a pig.
So who should you trust to fix the economy? Well, if you are all for doing the same thing and expecting different results (ie. clinically insane), then vote McCain. If what you are after is an effective, thoughtful, new approach to dealing with America's growing economic challenges...don't just pray for a Democrat in the White-House--put one there! Put an end to the insanity! Vote Obama/Biden in '08!
Charts from U.S. National Debt Clock FAQ
The charts below illustrate the growth of the U.S. Natioal Debt from 1940-2008. The first is not adjusted for inflation and the second has been adjusted for inflation.
As you can see when adjusted for inflation, the graph provides an even more pronounced illustration of the almost exponential (not quite a J curve though) expansion of debt under both Reagan/BushI and under Bush II. It also illustrates the effects of the Clinton Administrations move from huge Bush I deficits to the Surplus of 2000, evident in the leveling of f just before Bush II's disastrous eight years at the helm.
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