Tuesday, June 19, 2012

GOP Economic Genius, Chapter 537,629

The GOP wants to cut $2 billion a year from the SNAP program (formerly known as food stamps), ostensibly to reduce the deficit. A few questions are in order: 

Does the GOP care about reducing the deficit? They say so (loudly & often) but if so, why do they resist raising a single penny in taxes, regardless of circumstances, to increase revenues? And why do they continue their push to make the Bush tax cuts permanent & (in Paul Ryan's--and Romney's budget) to give even more tax cuts to the wealthy, further reducing federal revenues? 

The GOP makes two claims in defense of tax cuts: 
  • Cutting taxes on the wealthy (sorry--I mean, "job creators") will lead to a rush of investment, causing a dramatic increase in GDP growth. But that was tried under George W. Bush & we had the slowest growth in GDP & job creation since Herbert Hoover. 
  • Behind the scenes, many in the GOP (such as Grover Norquist) argue that intentionally creating the biggest deficits possible will force the government to stop spending, thereby making it, as Norquist put it, "small enough to drown in the bathtub." 

The GOP has managed to create the biggest deficits in history, but they faces a conundrum: The public hates government spending in the abstract, but they love the programs that provide them with benefits (Medicare & Social Security, for instance). Luckily for them, Obama tried to make a grand bargain with the GOP last year over the debt ceiling issue that includes cuts to Medicare, complicating Democratic efforts to draw clear distinctions between the two parties. The difference is that Obama seeks to reduce Medicare spending via a combination of guaranteed issue, quality metrics & other measures reducing costs by increasing the efficiency of delivery, while the Romney/Ryan plan simply hacks away at Medicare, Medicaid & Social Security with a hatchet. The problem for us is that explaining the difference is complicated while obfuscating it is easy. 

Meanwhile, there are the macroeconomic effects of the proposed GOP cuts to SNAP. Mark Zandi, chief economist of Moody's Analytics and former adviser to John McCain's 2008 campaign, has analyzed the tools available to government in boosting economic growth & ranked them in order of effectiveness. At the top? SNAP, unemployment insurance & direct aid to the states. At the bottom (just above accelerated depreciation)? Making the Bush tax cuts permanent. 

Ask yourself whether a party devoted to imposing the least effective economic stimulus while opposing all the most effective stimuli is more committed to improving the economy or to creating misery for their own electoral purposes. Is that patriotism? It's loyalty to something, but country seems to come second to the GOP. 

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