There are plenty of workers’ advocates and progressives calling for the end of the Bush tax handouts to the richest Americans. But not many of them worked for President Ronald Reagan.
David Stockman, former member of Congress and Director of the Office of Management and Budget during Reagan’s first term, penned an op-ed that blasts a hole in the modern Republican Party’s obsession with tax cuts. The Bush tax cuts in particular, Stockman writes, go against the traditional Republican value of fiscal responsibility. “If there were such a thing as Chapter 11 for politicians, the Republican push to extend the unaffordable Bush tax cuts would amount to a bankruptcy filing,” he writes.
Republicans used to believe that prosperity depended upon the regular balancing of accounts — in government, in international trade, on the ledgers of central banks and in the financial affairs of private households and businesses, too. But the new catechism, as practiced by Republican policymakers for decades now, has amounted to little more than money printing and deficit finance — vulgar Keynesianism robed in the ideological vestments of the prosperous classes.
Also surprising is the viciousness with which Stockman blasts Wall Street, and what he calls the “vast, unproductive expansion of our financial sector.” Rather than most Republicans, who reflexively laud the banks and blame all fiscal woes on low-income people’s personal actions, Stockman correctly identifies the big banks as parasites on the rest of the economy:
But the trillion-dollar conglomerates that inhabit this new financial world are not free enterprises. They are rather wards of the state, extracting billions from the economy with a lot of pointless speculation in stocks, bonds, commodities and derivatives. They could never have survived, much less thrived, if their deposits had not been government-guaranteed and if they hadn’t been able to obtain virtually free money from the Fed’s discount window to cover their bad bets.
The 2001 and 2003 “Bush tax cuts” pushed through by ideologically-driven Republicans destroyed the national budget surplus, drove up the deficit, and produced none of the economic stimulus in the private sector they were supposed to create.
It’s simple math: you can’t reduce the deficit and manage the debt while these Bush-era handouts remain on the books. Ending the Bush tax cuts will not only provide us with badly needed revenue to provide public services, it’s also the fiscally responsible choice.
A vote to extend the tax cuts for working families making under $250,000 a year, while letting the rest of the cuts expire, is coming up in the U.S. Senate. If the Senate decides to kick the can down the road, this issue will come up again in December 2012, when the tax cuts automatically come up for renewal or expiration.