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Republicans in Wonderland

Posted: May 21, 2011 | Author: | Filed under: 2012 presidential campaign, Economy | Tags: , , , , , , , |21 Comments

Republicans embrace and peddle voodoo economic memes whereever they can.  They all hold Ronald Reagan up as the godfather of great economics.  Just look at that graph to determine who exactly is responsible for the current deficit which they all think is a terrible problem.  Even odder are their “unorthodox”  economic policy prescriptions.  Here’s some of the more egregious suggestions as provided by Politico.

The Republican field is filled with potential candidates who have called for radical overhauls of the tax code, the abolition of the IRS, an end to the Federal Reserve central bank— and even a return to the gold standard.

Oddly enough, Mitt Romney is the only one that actually talks real economics.  The rest of them are in some bizarro world where math never adds up.  If Tim Pawlenty hasn’t disappeared by 6 pm CST, we may have to deal with his odd views in a debate where odd views will prevail.  Pawlenty is scheduled to announce his candidacy on Monday.

In one particularly striking recent moment, former Minnesota Gov. Tim Pawlenty railed against “fiat currency” in a recent appearance on Fox — a signal to a narrow constituency of voters who believe that America’s woes began when it abandoned the gold standard in the 1930s. He also has gone on the record supporting a flat tax — a single-rate income tax that would eliminate the bracket system. The single tax rate for all is a simple concept but would probably involve wiping out the current tax code — including many popular deductions and credits — just to generate enough revenue.

“I support a flatter tax rate. I don’t know if we can get to a flat tax in one leap, but moving in a flatter, more transparent direction, absolutely,” Pawlenty said on Larry Kudlow’s CNBC show in March.

Newt Gingrich has also indicated support for an across the board 15% flat tax.

Gov. Mitch Danielscalled for a value-added national sales tax paired with a flat tax. (Jon Huntsman passed a flat tax as governor of Utah, but hasn’t articulated a national platform.) And Paul wants no income or sales taxes at all, envisioning a government funded with tariffs, highway fees and excise taxes.

Further into the field, the plans get more exotic.

Herman Cain has backed the ‘Fair Tax’ plan, a proposal with a small, well-organized and vocal constituency, which would impose a national sales tax of just under 25 percent and abolish the income tax system. He has also backed a possible return to the gold standard — but only after we “significantly pay down our national debt, stabilize and grow our economy,” spokeswoman Ellen Carmichael told POLITICO.

 Our economy has always used a progressive tax rate.  We’ve never really considered value-added taxes or national sales taxes because we know these kinds of taxes hit the poor hardest.  Social Security is about the only real regressive tax that’s been enacted. However, disabling a reasonable capital gains tax has giving enormous wealth to the major rich who receive bonuses and inherit trust funds.  The suggested Republican tax schemes are most likely unworkable and would hit the middle class hard.  This would be especially true of those who are financing homes.

The odd calls for gold standards, eliminating the Federal Reserve Bank, and possibly even ending fiat currency are all insane suggestions that shouldn’t even merit a public platform.  Academic research has indicated that monetary policy has been mostly effective since the 1980s in achieving its intent.  Also, the Fed’s structure and laws have been copied by every other economic entity that’s formed within recent history because it’s been so successful. The most important aspect is to keep monetary policy out of the hands of politicians.

“Fiscal policy, I can see how we might want to have a broader debate. With monetary policy, it’s harder to see that,” said Mark Zandi, chief economist of Moody’s Analytics. “The strong consensus view is that the Fed has done a very good job — that it was put in a very difficult position.”

“I think there’s less sympathy for the argument that Federal Reserve needs a significant overhaul,” said Zandi.

But, facts and peer-reviewed research don’t appear to phase these folks.

Sen. Jim DeMint (R-S.C.), a supporter of the Fair Tax, faced attacks in his own state for supporting what Democrats cast as a massive sales tax increase. Gleeful Democrats simply neglected to mention that DeMint’s proposed policy would have also abolished the IRS. Similar attacks on Fair Tax candidates have occurred in other races. And this cycle, Herman Cain has already faced a similar tough questioning about his support for the Fair Tax in the most recent GOP presidential debate.

“According to the experts, the practical effect of a Fair Tax would be a tax cut for the wealthy and a tax increase for the middle class,” Fox’s Chris Wallace pointed out.

“Your experts are dead wrong — because I have studied the Fair Tax for a long time,” said Cain to loud audience applause.

So, who would you believe?  Economists or some CEO of a small time pizza chain?  The fact that these guys get a pretty receptive audience in the GOP is appalling until you see where the support comes from.  For some reason, the GOP has done a pretty good job ginning up support via xenophobic, homophobic, and gynophobic dog whistles and making economic statements that were never true and would never happen.  Since their voters reward them, there appears to be no end to the insane suggestions for economic policy that comes out of their mouths.

21 Comments on “Republicans in Wonderland”

  1. votermom's avatar votermom says:
    May 21, 2011 at 1:02 pm

    I don’t understand that chart. Are the bars debt?
    But not deficit? Because I thought Clinton balanced the budget, but that chart makes it look like BO does better than Clinton budget-wise.

    • dakinikat's avatar dakinikat says:
      May 21, 2011 at 1:31 pm

      No, it’s the percentage addition to the national debt. The debt is the total amount we owe and have borrowed. It’s like the total balance on the national credit card. That total still has Vietnam era expenses on it forward. I think Truman and Eisenhower basically paid for the previous stuff with the high tax rates on the wealthy. The Kennedy tax cuts were the first to stop the move towards paying the debt down.

      The deficit/surplus/zero balance is the addition to the debt that occurs every year. Even though Clinton balanced the budget in his last few years, his first term added to the debt because those years more was spent than brought in.

      Those bars are percentage increases to the federal debt (which again is the total outstanding) during that president’s time in office. Obama’s portion only represents two years. GHWBush had 4 years of deficit spending. They both had shorter periods to add to it.

      The majority of the Reagan deficit came from military spending. GWHBush had the Kuwait invasion. Of course, Dubya ran two unfunded wars and did extreme tax cuts.

      Obama’s will undoubtedly get much worse and will look more like Dubya’s but still, no one will match the Gipper. He also presided over the biggest tax increase in history.

  2. minkoffminx's avatar Minkoff Minx says:
    May 21, 2011 at 2:14 pm

    Here is some more Republicans beyond the looking glass:

    Taylor Marsh – TaylorMarsh.com – News, Opinion and Weblog on Progressive Politics

    the new Republican majority House was “to make Congress more transparent.” At least for Barletta and Heck, though, transparency apparently doesn’t apply to district get-togethers with constituents.

    PA Republican: Change Unemployment Benefits So People Can’t ‘Take A Paid Vacation’ | Crooks and Liars

    I try really, really hard not to hate people. I really do. But I can’t help it, I do hate the small-minded, vicious politicians who come up with these proposals. Dear God, please save us from the Republican nuts in the Pennsylvania state legislature. This is the same wack job who wrote a bill that will let Pennsylvanians shoot to kill if someone makes you nervous

  3. paper doll's avatar paper doll says:
    May 21, 2011 at 3:35 pm

    Terrific post …of course the Republicans are deluded and or lying. That’s what they do. But that’s not the biggest problem. The biggest problem is over the last 20 years or so , Democrats have increasingly AGREED with the deluded lying Republicans…or seeminly since they do little or nothing to stop them ( the Clintons being the expectation that proves the rule and why they have come for abuse from their own party as well as the GOP) The problem is increasingly there is no recourse from crazy Republican ideas as each party compete with each other over who will do the Koch Brothers bidding with more servile alacrity . 😦

  4. minkoffminx's avatar Minkoff Minx says:
    May 21, 2011 at 4:01 pm

    OT: Just a little PSA for all the movie geeks, tonight there is a great lineup on TCM.

    @6:15 One of the best movies Robert Mitchum ever made, directed by Charles Laughton:

    Overview for The Night of the Hunter

    @8:00 Simone Simon, so damn cool…

    Overview for Cat People

    @9:30 The sequel to Cat People, the scene with Simone Simon in the garden is magical.

    Overview for The Curse of the Cat People

    Okay, sorry to interrupt…If you can’t see them all, at least try to see Night of the Hunter. It is very, very good.

    • Beata's avatar Beata says:
      May 21, 2011 at 6:34 pm

      “The Night Of the Hunter” is one of the most frightening films ever made. Can’t bring myself to watch it tonight but I’ll be watching the two “Cat People” films.

      • bostonboomer's avatar bostonboomer says:
        May 21, 2011 at 6:45 pm

        That’s a great movie! I own a copy. Cat People is great too. Unfortunately, I don’t get Turner Classic Movies.

      • minkoffminx's avatar Minkoff Minx says:
        May 21, 2011 at 7:09 pm

        Beata, It’s the truth, frightening…and the look that Mitchum gives…terrifying.

        BB, no TCM, that stinks.

      • bostonboomer's avatar bostonboomer says:
        May 21, 2011 at 8:47 pm

        Yeah, I know. I can only get TCM if I pay about $8.00 a month for a “sports and entertainment” package.

  5. bostonboomer's avatar bostonboomer says:
    May 21, 2011 at 5:29 pm

    I really think that some of these Republicans–like Ryan, Paul, and Gingrich should be evaluated by mental health professionals. They are INSANE!!

    IMHO

    • bostonboomer's avatar bostonboomer says:
      May 21, 2011 at 5:30 pm

      Great post, Dak! The bar chart really spells out the damage Ronnie Ray-gun did to us.

  6. paper doll's avatar paper doll says:
    May 21, 2011 at 5:31 pm

    The rage moves West…believe me this is being talked about in the halls of power…how to stop it

    Tens of thousands protest throughout Spain, defying government ban

    http://tinyurl.com/3uyqv47

    Tens of thousands protestors continue to occupy Madrid’s Puerta del Sol and have gathered in the main squares of another 162 towns and cities across Spain in protest over unemployment, government austerity measures and a political system that serves only the banks and big business.

  7. The Rock's avatar The Rock says:
    May 21, 2011 at 6:34 pm

    Firemen say to put out a fire, you must starve it of its fuel, oxygen. Looks like Obumbles fuel is not as plentiful anymore….

    http://www.reuters.com/article/2011/05/21/us-usa-campaign-mideast-idUSTRE74K2PX20110521

    Hillary 2012

    • thebigotbasher's avatar thebigotbasher says:
      May 21, 2011 at 8:51 pm

      A restatement of the Bush/Blair position on Israel as official foreign policy of the US towards Israel is not going to cost the President any votes among Jewish voters, who are vastly more intelligent than the Teabaggers and the Likud Parrots in the US.

  8. dakinikat's avatar dakinikat says:
    May 22, 2011 at 1:14 pm

    Fantasy Island
    Are Republicans losing their grip on reality?
    By Jacob Weisberg

    At a press conference last week, someone asked Chris Christie for his views on evolution vs. creationism. “That’s none of your business,” the New Jersey governor barked in response.

    This minor incident, which barely rated as news for a few political blogs, offers a glimpse of Christie’s personality, which seems increasingly grumpy and snappish. But it says even more about the current state of the national Republican Party, where magical thinking trumps rationality, and even to acknowledge basic realities about the world we live in runs the risk of damaging one’s political future.

    Christie is not part of the natural constituency for Darwin-denial. He’s an intelligent man, a lawyer, a fiscal rather than a social conservative. But Christie is also someone who might want to run for president someday, or be selected as someone’s running mate. For those purposes, he must constantly ask himself the question: Am I about to say something to which a white, evangelical, socially conservative, gun-owning, Obama-despising, pro-Tea Party, GOP primary voter in rural South Carolina might object? By this standard, simple acceptance of the theory of evolution becomes a risky stance. To lie or to duck? Christie chose the option of ducking while signaling his annoyance at being put in this ridiculous predicament.

  9. dakinikat's avatar dakinikat says:
    May 22, 2011 at 1:27 pm

    Bruce Bartlett again:

    Polls show that Americans support higher taxes as part of a deficit reduction program and that only a small minority of Americans believe that the budget can be balanced with spending cuts alone.

    A May 11 Ipsos/Reuters poll found that three-fifths of people favor raising taxes to reduce the deficit.
    A May 4 Quinnipiac University poll found that 69 percent of people, including 49 percent of Republicans, support raising taxes on those households making more than $250,000.
    An April 29 Gallup poll found that only 20 percent of people say the deficit must be reduced only with spending cuts; 76 percent say that taxes should play a role.
    An April 20 Washington Post/ABC News poll found that by a 2-to-1 margin people favor a combination of higher taxes and spending cuts over spending cuts alone to reduce the deficit. It also found that 72 percent of people favor raising taxes on the rich to reduce the deficit and this is far and away the most popular deficit reduction measure.
    An April 18 McClatchy/Marist poll found that voters support higher taxes on the rich to reduce the deficit by a 2-to-1 margin, including 45 percent of self-identified Tea Party members.

    Republicans are working hard to enforce their no-tax-increase-ever orthodoxy, but there are signs that the dam is beginning to break. On April 7, former Reagan budget director Dave Stockman said, “It is simply unrealistic to say that raising revenue isn’t part of the solution. It’s a measure of how far off the deep end Republicans have gone with this religious catechism about taxes.”

  10. dakinikat's avatar dakinikat says:
    May 22, 2011 at 1:49 pm

    and Paul Krugman today:

    What Politico doesn’t include, but should, is the lemming-like rush to endorse the Ryan plan, which, although Very Serious, is also complete crank economics, with its insistence — in the teeth of all the evidence — that privatizing Medicare can somehow provide adequate health care at much lower cost. And then there’s the recent rise of default denialism — hey, let’s signal to everyone that we’re a banana republic, what harm can it do?

    In the first edition (but only the first edition) of his textbook, Greg Mankiw famously derided Reagan’s supply-side advisers as charlatans and cranks. It’s pretty clear that when Mankiw wrote that he imagined that this was only a phase, that the GOP would return to more sensible policies. In fact, however, the party is sinking ever further into deep voodoo.

    These are such bad economic times. It just kills me to see one party just stand in the way of anything that doesn’t follow their insane mantras. Some of those candidates should not support the reality denial. Their reality on the economy is about as realistic as the birthers and the Obama is a secret Muslim cult. Same with climate change and Darwin deniers. These folks are crazy!

  11. dakinikat's avatar dakinikat says:
    May 22, 2011 at 1:52 pm

    http://www.dailymotion.com/embed/video/xisu29
    WI Senate Vote on Voter Suppression Bill 5.19.11 by nicknice

    This is unbelievable!

  12. fiscalliberal's avatar fiscalliberal says:
    May 22, 2011 at 5:34 pm

    Dak – small world. Fred Risser is one of the first campaigns my wife and I supported back in the early 60’s after supporting Gene McCarthy in Madison.

    Back then, we had three sided signss that you attaced to your car roof.

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