What Makes a Democrat, Part 4 - Economics
This may be my most key issue, and the one I could talk about the most, but let's keep it brief. If you boil down Conservative economic policies, they can be summed up in three major points:
1. Tax Cuts encourage economic growth
2. Government Regulation weakens the economy
3. The more free the market, the better for everyone
Tax Cuts
To tackle the first, tax cuts do cause a spike in economic growth - temporarily. Then you see an economic downturn because of government debt, the tax cuts don't pay for themselves in growth, and programs/services that actually contribute to economic growth are cut. Here's a sample case, an article from 1999.
Tax cuts were on the table because economists predicted the government would bring in a historic amount of money in the next few years. The article argues that should be spent to pay down debt, and support issues that needed investment, also saying that a projected budget isn't the same as money in the bank.
In the end, George W. Bush got tax cuts through Congress in both 2001 and 2003, and 9/11 happened in 2001, sending us to war in Iraq.
Between the increased spending on the war, and the tax cuts, that budget surplus turned into a massive deficit, and over the next few years (combined with deregulation) caused the massive economic crash that followed Bush's second term. The "Great Recession."
This same cycle has happened again in Trump's term - steady economic growth and a particularly friendly Republican Congress easily passed an ambitious tax cut. That tax cut was supposed to "pay for itself" by causing so much economic growth that taxes, even at the lower rate, would bring in more money than was lost in revenue.
Not only did that not happen (not even close) but shortly after a disappointing 2018-2019 for the economy, the COVID-19 economic shutdown hit in 2020.
While the tax cuts didn't cause the damage of the COVID-19 shutdown, they put the government in a position where it can't possibly respond the way it needs to, which leaves the economy in danger of a free-fall.
Also, the tax cuts went straight to the top. A full 94% of savings in taxes went directly to corporations and CEOs. Most Americans saw little to no benefit, even before the shutdown.
To tackle the first, tax cuts do cause a spike in economic growth - temporarily. Then you see an economic downturn because of government debt, the tax cuts don't pay for themselves in growth, and programs/services that actually contribute to economic growth are cut. Here's a sample case, an article from 1999.
Tax cuts were on the table because economists predicted the government would bring in a historic amount of money in the next few years. The article argues that should be spent to pay down debt, and support issues that needed investment, also saying that a projected budget isn't the same as money in the bank.
In the end, George W. Bush got tax cuts through Congress in both 2001 and 2003, and 9/11 happened in 2001, sending us to war in Iraq.
Between the increased spending on the war, and the tax cuts, that budget surplus turned into a massive deficit, and over the next few years (combined with deregulation) caused the massive economic crash that followed Bush's second term. The "Great Recession."
This same cycle has happened again in Trump's term - steady economic growth and a particularly friendly Republican Congress easily passed an ambitious tax cut. That tax cut was supposed to "pay for itself" by causing so much economic growth that taxes, even at the lower rate, would bring in more money than was lost in revenue.
Not only did that not happen (not even close) but shortly after a disappointing 2018-2019 for the economy, the COVID-19 economic shutdown hit in 2020.
While the tax cuts didn't cause the damage of the COVID-19 shutdown, they put the government in a position where it can't possibly respond the way it needs to, which leaves the economy in danger of a free-fall.
Also, the tax cuts went straight to the top. A full 94% of savings in taxes went directly to corporations and CEOs. Most Americans saw little to no benefit, even before the shutdown.
Government Regulation
As for the second, Government Regulation can depress economic growth. I personally want to see it streamlined/trimmed down. However, it is a critically necessary part of Capitalism.
Looking back at the 2008 crash, what happened was the banking/financial sector was able to avoid regulations/regulators, and pushed harder and harder to approve bigger mortgages for people who couldn't possibly afford what they were approved for ("sub-prime" mortgages).
A huge number of these borrowers defaulted, led by (but not limited to) the US, and that caused a chain reaction where mortgage providers all over the world went bankrupt one after the other.
As for the second, Government Regulation can depress economic growth. I personally want to see it streamlined/trimmed down. However, it is a critically necessary part of Capitalism.
Looking back at the 2008 crash, what happened was the banking/financial sector was able to avoid regulations/regulators, and pushed harder and harder to approve bigger mortgages for people who couldn't possibly afford what they were approved for ("sub-prime" mortgages).
A huge number of these borrowers defaulted, led by (but not limited to) the US, and that caused a chain reaction where mortgage providers all over the world went bankrupt one after the other.
"Freer is Better"
To sum this all up for the third, the "Free Market" runs on a labor force and infrastructure that are funded by the Government, through tax revenue. Some part of every cent every company in this country earns would not be possible if not for roads, bridges, electricity, public education, the postal service - etc.
On top of that, looking back at the first two points, tax cuts have - repeatedly - hurt the economy and the American people. Lack of regulation has repeatedly led the private sector to focus solely on profits and led to economic crashes, again at the cost of the people and the country.
In addition, all of these policies assume that what's good for the wealthy in the US is good for everyone. It's not. Over and over again the wealthiest Americans have benefited during, and been insulated from, economic troubles - and they make these downturns worse while doing it. Throughout every single fiscal crash and economic downturn, the wealthy in this country have gotten richer. Even now, the highest income earners in the country have already recovered, while the worst of the economic impact is still coming.
Why is the worst still coming? Because the Republican Congress is pulling back the economic stimulus that's kept the economy afloat so far.
And that is the fundamental problem the Conservative/Republican economic policies.
We need stable government income and support programs; not mounting debt and tax cuts for those who don't need help.
We need reasonable (and functional and enforceable) regulation to prevent practices that lead to economic crashes
To sum this all up for the third, the "Free Market" runs on a labor force and infrastructure that are funded by the Government, through tax revenue. Some part of every cent every company in this country earns would not be possible if not for roads, bridges, electricity, public education, the postal service - etc.
On top of that, looking back at the first two points, tax cuts have - repeatedly - hurt the economy and the American people. Lack of regulation has repeatedly led the private sector to focus solely on profits and led to economic crashes, again at the cost of the people and the country.
In addition, all of these policies assume that what's good for the wealthy in the US is good for everyone. It's not. Over and over again the wealthiest Americans have benefited during, and been insulated from, economic troubles - and they make these downturns worse while doing it. Throughout every single fiscal crash and economic downturn, the wealthy in this country have gotten richer. Even now, the highest income earners in the country have already recovered, while the worst of the economic impact is still coming.
Why is the worst still coming? Because the Republican Congress is pulling back the economic stimulus that's kept the economy afloat so far.
And that is the fundamental problem the Conservative/Republican economic policies.
We need stable government income and support programs; not mounting debt and tax cuts for those who don't need help.
We need reasonable (and functional and enforceable) regulation to prevent practices that lead to economic crashes
The "Crazy Liberal" solution?
Streamline Government Regulation, set taxes at a fair rate (much closer to what it was at the best economic times of this country) and reinvest the increased revenue in the working class, and the infrastructure desperately in need of an update.
We need more government research in scientific and technological breakthroughs, which more often than not directly benefit Americans both economically, and in new companies and industries.
We also need to take a long, hard look at some kind of Universal Basic Income (UBI). It's the same concept as tax cuts, money from the Government going directly back into the economy, but instead of 94% going directly into the pockets of the ultra wealthy, if you give money to the majority of Americans, they'll spend it. On necessities, on local businesses, even to start their own businesses. Especially if UBI is capped so only people making under, say, $150,000 a year received it.
Nearly every dollar spent on UBI would go straight back into the economy. In theory, that would give us an economic boom like this country has never seen, and doing everything that tax cuts have promised to do, but never delivered.
Streamline Government Regulation, set taxes at a fair rate (much closer to what it was at the best economic times of this country) and reinvest the increased revenue in the working class, and the infrastructure desperately in need of an update.
We need more government research in scientific and technological breakthroughs, which more often than not directly benefit Americans both economically, and in new companies and industries.
We also need to take a long, hard look at some kind of Universal Basic Income (UBI). It's the same concept as tax cuts, money from the Government going directly back into the economy, but instead of 94% going directly into the pockets of the ultra wealthy, if you give money to the majority of Americans, they'll spend it. On necessities, on local businesses, even to start their own businesses. Especially if UBI is capped so only people making under, say, $150,000 a year received it.
Nearly every dollar spent on UBI would go straight back into the economy. In theory, that would give us an economic boom like this country has never seen, and doing everything that tax cuts have promised to do, but never delivered.
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