Shoving economy toward an abyss
Show me a unified GOP, and Iíll show you a budgetary disaster about to happen. Thatís what makes the pending showdown over raising the national debt limit so worrying.
The betting system the GOPís been playing for the past 30 years is called supply-side economics. ěThe theory goes like this,î explains David Cay Johnston. ěLower tax rates will encourage more investment, which in turn will mean more jobs and greater prosperity ó so much so that tax revenues will go up, despite lower rates.î
To anybody with a passing interest in the material world, itís clear that this has never happened. Over the same period, the national debt has risen to more than $14 trillion ó almost 90 percent of it under Republican presidents.
Meanwhile, ordinary citizens have failed to prosper as President Reaganís seductive ěmorning in Americaî rhetoric promised. Since 1980, Johnston shows, ěthe average income of the vast majority ó the bottom 90 percent of Americans ó has increased a meager $303, or 1 percent.î Meanwhile, the income of the upper 1 percent of taxpayers more than doubled, and that of the top tenth of 1 percent increased more than 400 percent.
Given current conservative hysteria about ěrunaway spending,î itís worth remembering that the United States last balanced the federal budget in FY2001 under Bill Clinton.
That was largely a result of the Clinton income-tax increases of 1993, enacted without a single GOP vote amid universal Republican predictions of doom. They probably cost the Democrats control of Congress in 1994.
Enter George W. Bush and the now-infamous tax cuts of 2001 and 2003. again promised lower taxes, higher revenue and boom times.
Again, they were virtually unanimous, voting to cut marginal income tax rates mainly on the wealthy by 224-1 in the House and 48-3 in the Senate.
Two wars and a large entitlement increase (Medicare, Part D) later, no boom took place. At its peak in 2007, the Bush economy had produced roughly 8 million jobs (7 million of which vanished in the 2007-2009 financial crisis). Budget deficits soared, topping out with the $1.3 trillion FY2009 shortfall President Obama inherited that January.
ěWill the tax cuts pay for themselves?î Edward Lazear, chairman of Bushís Council of Economic Advisors told a Senate committee in 2006. ěAs a general rule, we do not think tax cuts pay for themselves. Certainly, the data presented above do not support this claim.î
In direct consequence, the national debt almost doubled under George W. Bush, from roughly $5 trillion in 2001 to more than $10 trillion in 2009.
Also in consequence, every Republican leader now posing as a hard-line fiscal conservative ó Speaker John Boehner, Rep. Eric Cantor, Rep. Paul Ryan, and Sen. McConnell ó voted to increase the national debt limit at least seven times under President Bush. Ironically, of the present players, only Barack Obama made what he now calls a protest vote against raising the debt limit in 2006.
So now the same posers vow to risk the ěfull faith and creditî of the U.S. Treasury during a fragile economic recovery unless President Obama agrees to deep cuts in the nationís social safety net.
A mature electorate would have wised-up by now.

Gene Lyons writes for the Arkansas Democrat-Gazette.