STARVING THE BEAST

buy modafinil in nigeria STARVING THE BEAST

            The new tax cuts enacted by Trump and the Republicans in Congress are the latest salvo in the long term Republican policy to “Starve the Beast”. The policy goal is to cut taxes to a critical point, then use the high budget shortfall as a rationale to cut or rather, to gut government spending. This follows the basic belief of Republicans that government should not pick winners and losers in society, unless the winners are the super rich.

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Paul Ryan, who has been a long time advocate of this process, has already announced his intention to begin legislation for cuts in Social Security, Medicare, Medicaid, Environmental Protection, Food Stamps and Education. These parts of the American Social Safety Net have been derided by Republicans since there were first instituted. In the eyes of Republicans, government should only enable market driven responses to issues such as education, health care and disadvantaged persons. They truly believe that the capitalist system provides a mechanism for insuring basic human subsistence needs.

Yet, what Republicans fail to understand is that the market is not equipped to provide for the common defense nor to promote the general welfare of WE the people. This is why tax dollars are used to build roads and bridges throughout the nation. There is no business interest in building free highways and streets. Yet, business benefits most from there being a safe and effective means of transferring goods to market. There was no benefit in building the free and open internet, as the federal government did and there was no profit in building an air traffic control system for the nation. Simply put, the things the federal government uses our tax dollars on, benefit all of society.

The deep tax cuts in order to force cuts in spending experiment has been conducted before by Republicans with disastrous outcomes every time.  In 2013, Kansas Gov. Sam Brownback cuts corporate taxes all the way to 0%. It was said that business stimulation from the cuts would jump start capital investment, thereby creating jobs and more tax revenue. Instead, it dug a deep hole in the state’s budget, causing a massive shortfall. The beast had been effectively starved, but got out of control because a hungry or starving beast will eat any and everything. The pressure on education, pensions and medical services was enormous.

Gov. Brownback then turned to trying to cut state funding of schools and health care. Finally, in 2017, Kansas was forced to increase taxes to cover the enormous budget deficits. Today, Kansas’ economy is in ruins. It has a high income tax, high sales tax and other new ancillary taxes, in addition to having had to rollback cuts in the corporate sales taxes.

In Louisiana, Gov. Bobby Jindal wrecked his state’s economy in the exact same manner. He came into office and ended the Stelly tax plan, which raised taxes on upper middle and high income earners while also eliminating the states sales tax in certain necessary items. Jindal’s actions created a budget shortfall which he had intended to cut spending in order to cover.

Beginning to see a pattern here? This is actually a Republican policy goal that goes all the way back to the early days of Ronald Reagan. On February 5, 1981, Reagan gave a speech that talked about cutting taxes in a manner akin to cutting a child’s allowance to force him to spend less. Reagan believed that governmental spending had become wasteful, and its expenditures superfluous on items government should not be funding.  If taxes were reduced and the federal treasury starved, the government would find a way to be more frugal.

Thus, Reagan cut taxes and saw revenue increase. This was due to the Laffer Curve, which theorized that tax rates had hit a level so high in 1981, that the higher rates caused revenue to decrease by discouraging business and capital investment. Reagan cut tax rates that were as high as 70%. Thus, at the time of the Reagan tax cuts, America was at the top of the Laffer Curve. Today, even before the tax cuts enacted last month, America was at the lower end of the Laffer Curve, with the highest rate being 39%. Thus, at 39%, cutting taxes does nothing but cut revenue.

Republicans keep truing to relive those glory days of Ronald Reagan because that’s when the party peaked. In this way, Republicans are no different than that high school classmate who was the football hero in 12th grade, and now at age 47, still wears his letterman’s jacket and attends every game. Life was never any better, so he continuously wants to relive that time. Yet, Republicans purposefully forget that Reagan failed in his attempt to starve that beast.

While his massive tax cuts of 1981 resulted in an increase in tax revenue, Reagan’s increases in defense spending ate that increased revenue and then some. The hole in the budget was so grave so quickly, that Reagan signed The Tax Equity and Fiscal Responsibility Act of 1982, which at that time, was the LARGEST TAX INCREASE in American history, absent a state of war. He continued to increase taxes every year of his presidency thereafter.

Reagan realized he could not simply starve the beast into docility. Yet Republicans, lost in their loathing of social welfare programs, have turned to using this tactic as a means of eliminating them. Conversely, the benefits of social welfare programs and incentives to the middle class were the tools used by both Presidents Clinton and Obama during the periods of massive economic expansion which oversaw in there respective terms.

In 2001, rather than use the projected $10 Trillion budget surplus to pay off the national debt, President Bush signed what he called the largest tax cut in American history to, “give the surplus back to the people.”  Such a noble idea, except, there were bills that needed to be paid and the tax cut only served to increase the deficit and the national debt. In the end, cutting taxes did not stimulate the economy. Instead, W. Bush’s attempt to starve the beast brought  deficits and caused the financial crisis of 2008.

President Obama used government spending to create jobs and spur consumer spending. Of course, Republicans wanted to cut taxes again, but Obama mostly resisted. He prevailed on the theory that business will increase capital investment with increased consumer spending. Republicans thought that meant tax cuts for the rich, but Obama rationalized that poor and middle class people are the real “spenders” in America. For most low to middle income members, family spending is an average is 75%-90% of monthly family income.

Businesses are going to take this massive tax cut from Trump and spend it buying back their own stock, increase executive pay, and pay out dividends to investors. The lion’s share of that money will never reach the streets of America. On the other hand, money to a low income person in the form of  middle class tax cuts, health care, food stamps, is directly converted into consumer spending and thus, increased demand for goods and services and therefore, business expansion.

Yet, Republicans see food stamps as a means of rewarding the lazy. “Tell that lazy bum to go out and get a job!” But corporate welfare is far more pernicious than social welfare. How do Republicans justify giving a $100 Billion dollar corporation free tax dollars in hopes that they invest it. The better option would be to give the breaks to a large class of people with the knowledge that they will increase consumer spending.  Lower and middle class workers don’t have the option of simply hording extra cash, as corporations have proven they would do with tax cuts.

Corporations use more of America’s resources which were built and paid for by tax dollars. Remember when President Obama said that businesses did build their business alone? Republicans were up in arms because Republicans do not believe in corporate welfare. For example, last year, Foxconn announced a plan to build a $10 billion manufacturing plant in Wisconsin, creating 3,000 new jobs, and later growing to 13,000. Yet, the State of Wisconsin, promised Foxconn $3 Billion in tax breaks in order to lure them to the state.

Wisconsin will pay nearly $20,000 per job, which is simply third party welfare. Rather than help people directly, they choose to pay a middle man, Foxxconn, free tax dollars hoping Foxconn will trickle that money to the masses. Yet, those tax dollars spent on the humans of the state, would have created far more than the three to thirteen thousand jobs expected. Making college affordable makes for a smarter and more productive nation; feeding families increases demand for retail goods, which creates jobs trying to meet those demands, which creates more demand; which creates more jobs…

But, according to the Republican belief, the social safety net in America is way too high. People should be forced to get up off their ass and get a job. Republicans constantly talk about the welfare queen that just pumps out more and more babies to receive more and more government benefits. Yet, most of those benefits were eliminated under Bill Clinton. We hear Republicans talk about forcing people to have a job in order to receive food stamps or Medicaid. Yet, more than half of the people that go to food shelters are working families, nearly half of all food stamp recipients are people with jobs that simply don’t pay enough. As well, nearly a third of Medicaid recipients are low income wage earners.

Republicans won’t talk about increasing the minimum wage, or regulating the price of pharmaceuticals. They talk about allowing the market to dictate prices, just as they restrict the use of tax policy and government purchasing power to force a decrease the price of those pharmaceuticals. Every industrialized western nation has a social safety net that sets a basic standard of living which, as a nation, citizens should not live below. In all western nations, (Europe, Canada, Australia, New Zealand) health care is considered a right rather than a product or service. The United States stands alone in arguing that access to universal health care is not a human right.

Yet, just as there is no market driven solution to roads and streets, there is no market solution to health care. It was once a Republican talking point that poverty stricken freeloaders should be forced to pay something into the health care system as they consume so much of it without paying the bill. In fact, prior to 2010, the largest single cause of individual bankruptcies in America was health care bills. That changed after 2010 with Obamacare.

The individual mandate, repealed by Trump’s tax cut, was the Republican’s idea of saying everyone must ante up something, to pay into the system that everyone needs and will eventually use. Back then, Republicans realized that those hospital bills which went unpaid by the individuals were ultimately paid by taxpayer dollars. Hospitals had to be compensated and the federal government was that final guarantor.

Thus, while Republicans try to starve the beast, they miss the point. The beast that they are trying to starve may well be that good beast that holds the bad beast in check. Giving free tax dollars to corporate fat cats and billionaires does absolutely nothing to help the other 99% of Americans.  In reality, it is that beast of corporate welfare that must be starved.

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