The Road to Serfdom, Part II
My friend, SJ from IN, wrote comments to my previous hub that I felt were worthy of a thoughtful response. So here goes:
1- Don't forget that before the Clinton taxes cuts we had "the largest tax increase in U.S. history" that was supposed to wreck the economy- the tax cuts came afterward, when the economy was rocking- no?
Reply: well actually, there is merit to that account of history. But remember what else passed in the meantime, along with the election of the opposition majority in Congress - two major free trade agreements, welfare reform, a Presidential line item veto (later ruled un-Constitutional) - and the federal government was actually shut down for several weeks - saving us a lot of money. These all helped inspire short term market confidence, but also helped set up more economic distress for the future.
2- Under the theory of "trickle down economics", where lowering taxes stimulates growth, and thus tax receipts, why did the tax cuts of the Bush II years not lead to prosperity? Why did they lead to significantly lowered receipts, and thus rapidly exploding deficits and debt? Then, the worst economy since The Great Depression?
Trickle down economics, I believe, is only a theory in the sense of other conspiracy theories. To give a correct, historical account of the events you raise in your questions, all tax cuts do stimulate growth in one sense or another - even, statist, Keynesian theory acknowledges this truth. The tax cuts under Bush still have not been enacted permanently - at a time they are desperately needed, and are set to expire in about 196 days. Please write Congress and ask them to make these cuts permanent - we need them.
The Bush Presidency was weighted down in a neo-conservative nightmare, with middle eastern Islamicists firing on one side, and radical western environmentalists on the other - both holding oil and thereby, growth in the American economy hostage.
And wasn't The Great Depression preceded by a similar era of lax government oversight?
Keynes pointed out that "in the long run, we're all dead". He was right. And thus, all of the people in charge of economic policy in that era are now dead - hence, not around to ask about "lax government oversight". I'm not sure what that means.
Hey, I get that the government spends too much, but might the exploding deficits & debt have a little something to do with lowering of marginal income tax rates on the more affluent, while strapping the less affluent with more and more "nickel & dime" taxes - like the doubling of sales taxes, excise taxes, fuel taxes, consumption taxes of every imaginable kind?
The idea is to give incentives for earning income and for saving - if there weren't so many other disincentives to earning and savings, e.g. draconian child support and paternity laws, etc., it would work and we would have a healthier economy.
3- On a slightly different note- why are conservatives today, as we speak, and for the past few weeks, calling for MORE government intervention and control / oversight over BP? Isn't the free market supposed to take care of itself? Is it possible the White House has been slow to react because they have been so bruised by bogus claims of "nationalization of the banks" and "nationalization of the auto industry" when those claims are simply unfounded?
i don't consider myself a "conservative" and admit, I don't understand how they think. I would rather see BP calling for more oversight of BO (Barack Obama), than vice versa - but they are scared to do that. Big capital begets big government, otherwise the capitalists become the government - so we may be stuck, but that's another hub for another day.
As to your last question, since they have been pursuing a form of nationalization (socialization, central economic control) on as many fronts as possible - and not too discreetly, although their semantics may be artful - no, that is not possible.
Aren't banks repaying the TARP guarantees back with interest? Isn't GM moving rapidly toward an IPO that would allow the government to "re-privatize" it's stake in GM?
Tomorrow I will write a hub on the downfall of both parties - the federal reserve - that addresses these questions. In short, when the fed funds the bailout, the money gets turned over and goes back to the fed with interest - and the fed holds the keys to their future, we already have nationalized industry.
And sadly for your side, it may not be your progressive allies who are running that show. If Big R's like Cheney, Bernacke and Paulson team up together to keep the little guy poor and needy - don't you think they will succeed? Unfortunately, they are bankrupting a lot of wealthy folks along the way.
Hey, I don't claim to have the answers, but I wish the "liberal media" would ask questions like this, and more importantly, demand the answers.
That would require thinking beyond the next bong hit...I would love to see it.