I’m afraid that, at this point, I’m quite confused about where the Republicans stand on deficits. Both President Reagan and President Bush grew massive deficits during their time in office, but ever since President Obama took office the Republicans seem to have finally discovered the need for a balanced budget. Or at least, that’s what they’ve been saying.
Each week, President Obama gives a radio address, which the Republicans then respond to. Senator Saxby Chambliss recently gave this response. In it, he called the debt “one of the most dangerous threats confronting America today.” Going further, he said, “At some point we have to say ‘enough is enough.’” This was, of course, in response to the Democrats’ desire to extend about $30 billion in unemployment benefits at a time when there are 5 unemployed Americans for every available job. And as the effect of the stimulus bill wears off, and with no second bill coming, that number will probably only increase.
No one likes deficit spending (except apparently Bush’s Republican Congress), but $30 billion more in deficit spending isn’t going to be the straw that breaks the camel’s back. Investors are still buying government bonds at low interest rates, showing that they are confident in the government’s ability to pay off its debt and that they are not yet concerned about inflation. In other words, ensuring that American citizens can keep food on the table will not have a significant impact on the future economic outlook of our country.
However, I can understand the Republican position; again, no one actually wants deficits. Which made this surprising. On Monday, Senator Jon Kyl, the Senate Minority Whip, was asked why, if deficits are such a problem, Republicans are advocating for an extension of the Bush tax cuts to the richest 2% of Americans. This would result in at least $650 billion in lost revenue over the next decade and the Republicans have yet to say what government programs they want cut to pay for the tax cuts.
Kyl’s response? “You do need to offset the cost of increase spending. And that’s what Republicans object to. But you should never have to offset the cost of a deliberate decision to reduce tax rates on Americans.” And when he says Americans, he means only rich Americans, since part of the Obama stimulus plan the Republicans so strongly objected to included a tax cut for 95% of Americans.
But maybe Kyl had gone off the reservation? Maybe his boss, Senate Minority Leader Mitch McConnell, would set the record straight.
“There’s no evidence whatsoever that the Bush tax cuts actually diminished revenue. They increase revenue, because of the vibrancy of these tax cuts in the economy. So I think what Senator Kyl was expressing was the view of virtually every Republican on that subject.”
I have one question for Senator McConnell: on what planet do you spend most of your time?
First, in the years leading up to the financial collapse, the American economy was underperforming. Second, trickle-down economics has never worked. Ever. So, no, it won’t lead to increased government revenues; it will lead to even larger deficits. The Republicans never stop talking about how President Obama should cut government spending, but when in power, the Republicans refuse to do so. They also never say which programs they want to cut. Will they reduce Medicare spending? How about ending Social Security? Shall we cut education spending? Or what about defense? Where is the “wasteful spending” they want to cut?
To put this all in perspective, in an interview yesterday Alan Greenspan said that it was time to let the tax cuts expire. This is the same Alan Greenspan who, as Chairman of the Federal Reserve, helped pass the tax cuts in the first place. Why does he support letting them expire? “…unless we start to come to grips with this long-term outlook, we are going to have major problems.” In other words, tax cuts will lead to more deficits. And since $650 billion is about 20 times greater than $30 billion, one has to assume the Republicans are lying about being concerned about the deficit. So why are they blocking unemployment benefits?