Saturday, June 13, 2009

Portrait of Political Irresponsibility

Starting in the 1970s, the GOP in Congress (with help from some Dems) removed the Depression-era oversight of the banking industry & prevented regulation of complex financial instruments such as credit-default swaps.

Congress (still under Dem control but totally craven in the face of GOP attacks) passed the Reagan tax cuts in 1981, resulting in federal deficits bigger than those of all previous presidents combined. (Reagan did a U-turn a year later, increasing taxes to refill the coffers, but that never made it into conservative mythology.)

In 1995, the Gingrich-era GOP Congress shut down the government in an effort to force President Clinton to slash social spending and cut taxes. Millions of people around the country, dependent on the federal government for social security payments, paychecks, various services, etc., were hurt by this stunt & the GOP had to back down.

The GOP-led Congress under President Katrina passed enormous tax cuts, turning the biggest budget surplus in U.S. history into the biggest deficit in a year. This in spite of our involvement in 2 wars simultaneously.

The GOP-led Congress voted in lockstep with President Katrina’s administration from 2001 through 2006, authorizing spending on the Iraq War, etc. It exercised no oversight during that time.

The GOP has argued, contra historical evidence, that tax cuts are the answer to the current economic crisis. Economists—including conservatives, agree that tax cuts would turn the current crisis into outright catastrophe.

In mid-September, 2008, Lehman Brothers collapsed and there were large withdrawals from the Reserve fund. Against that backdrop, the bank bailouts (which I certainly agree are due for criticism on a number of grounds) began. Obama’s economic plan was crafted in response to the situation he inherited—one caused by the combination of factors mentioned above (not primarily due to activities of Fannie Mae & Freddie Mac, as the GOP & its wingnut chorus would have us believe). Obama’s economic plan only passed in the Senate due to a compromise with 3 GOP “moderates” & some blue dog Dems. The so-called compromise eliminated federal funding for state unemployment programs in the midst of the worst economic crisis since the 1940s—this despite the CBO’s study showing that one of the most effective mechanisms for reviving the economy in a recession is unemployment insurance (the people who get it need to spend it; therefore it cycles through the economy, boosting economic activity via the multiplier effect). So if the recession lasts longer & gets deeper, we all know who to thank for it.

The CBO, the Commonwealth Fund and others analyzing the numbers project that without the public option, health care costs are projected to increase to 60% of the federal budget by 2030, crowding out other federal programs. The GOP in Congress is universally opposed to Obama’s health care reform plans, especially the public option.

The GOP-led Congress refused persistently to do anything in response to global warming, making our ability to do anything about it now much more difficult—and expensive.

Despite all the above, die-hard wingnuts continue to argue that Obama is a socialist, he’s throwing money around recklessly, and we need a return to GOP govenance. Try to imagine what shape we’d be in now if the party whose only principle is tax cuts (for the richest 1% of the population, at that) were in power now. God protect us from such a fate.

Some still claim, despite all the above, that there’s no real difference between the two major parties—that “everyone does it.” The record is clear that, despite definite cravenness on the part of some Dems, overwhelming responsibility for the mess we face lies with the GOP.


Dave said...

The GOP has argued, contra historical evidence, that tax cuts are the answer to the current economic crisis.

As a candidate, Mr. Obama called for immediately repealing those tax cuts. He decided instead to keep them in place through 2010, as scheduled, reflecting the widespread belief that raising taxes further depresses economic activity.

Sign Sans Signified said...

Yeah, I'm aware of that. I won't get into the dispute over whether letting tax cuts expire equals raising taxes here; suffice it to say I really disagree with that decision. My sense is that it was not so much the belief that raising taxes depresses economic activity as a political judgment that taking the Bush tax cuts off the table might enable Obama to attract more GOP support for his economic package. Needless to say, we all know the GOP had no intention of cooperating with him in any case.

In re the question of higher taxes depressing economic activity, taxes on the wealthy were much higher in the 1960s than they are now, but economic activity then was far more robust than it was during President Katrina's term in office. Of course, that doesn’t stop some from believing in that causal relationship, but so it goes...