Faith & Social Justice: In the spirit of Richard Overton and the 17th C. Levellers

Were Modern GOP Politicians EVER “Fiscally Responsible?”

O.K., I keep wanting to blog about broader religious ethics things, but the news keeps me coming back to the political–especially because I feel an obligation to set the record straight when the talking heads and the “conventional wisdom” is simply dead wrong.  The new GOP talking point is to admit that they were spendthrifts under Bush but claim this as a kind of “temporary insanity” as they get in touch now with their inner deficit hawks.  This plea is receiving more of a sympathetic ear from the mainstream media than it should because the huge GOP megaphone and echo chamber since Reagan has led this to become conventional wisdom: Democrats are tax and spend liberals who run up huge budget deficits while saddling the average taxpayer with an incredible tax burden. This leads to poor economies and “generational theft” as our children and grandchildren have to pay for these bad actions.  Republicans, meanwhile, generate more revenue by tax cuts that increase productivity and income for all. They couple this with cuts to wasteful spending that shrinks bloated government bureacracies and leads to balanced budgets.

That’s the conventional wisdom.  The GOP then explains the last eight (8) years by saying that George W. Bush wasn’t a true conservative (???!!!!) and did grow government with wasteful spending and the GOP-led Congress went along out of misplaced loyalty in the aftermath of 9/11 and patriotic loyalty.  They now repent and are working against the evil tax and spend liberal/socialist Obama who is prolonging a simple downturn in the business cycle by returning to the horrible Keynesian economics of the failed New Deal.  If the U.S. citizens will only trust them with power, again, they will save the country by returning to the low-tax, high-income, small government, balanced budget, no debt years of Saint Ronald Reagan.


In the chart below (from the non-partisan Congressional Budget Office) you see budget deficits and surpluses in various presidential terms from Jimmy Carter through 2006 of George W. Bush.  Notice how tiny the budget deficit was under Carter.  Carter was a budget hawk who inherited a recession caused by the end of the Vietnam War. (Because the huge size of federal spending during WWII led to the end of the Great Depression, many people think wars are generally good for economies.  The opposite is the case: recession usually follows war.) Although he created the Departments of Education and Energy, Carter watched every dime of federal money–and broke his campaign promise to work for universal healthcare because he thought the country couldn’t afford it.

Reagan ran huge deficits every year of his presidency, mostly because of his giant military spending.  He did cut many social programs, but nowhere near enough to shrink government.  And his huge tax cuts were followed by tax increases–those are the years when his deficits go down some.  The first George Bush was right back when he campaigned against Reagan in the 1980 GOP primary:  “Trickle down” Reaganomics really is “voodoo economics.”  It didn’t work–and the end of infrastructure improvements and revenue sharing between the federal government and the states led to the disastrous state of our current infrastructure.  But Bush I had to embrace Reaganomics when he wanted to be president in 1988–thus  his infamous “Read my lips, no new taxes” pledge.  Gulf War I led to a recession, coupled with the Savings and Loan scandal and bailout and Bush I had to break that pledge and raise taxes–which probably shortened the recession even though it cost him his presidency.  Clinton inherited a recession, raised taxes on the wealthy, shrank the government, and, over 8 years took the government from record deficits to huge budget surpluses.  George W. Bush inherited that surplus blew it by huge tax cuts, mostly on the rich. Then, he spent like a drunken sailor on Gulf War II  and occupation (with a 2nd round of tax cuts, even more skewed to the upper 1%), plus the poorly written Senior Drug Benefit which ended up being an insurance giveaway.  That led directly to the the horrid deficits which Obama inherited–along with a total financial meltdown due to rampant deregulation and a culture of greed.budgetdeficitorsurplus


Republican fiscal irresponsibility is not recent.  They talk a good game of fiscal responsibility, but their record is horrendous.  In fact, studies have shown that tax cuts have seldom shrank government at all–just led to revenue losses which had to be made up by bigger tax increases down the road.  Let us remember, too, that while Congressional Democrats were trying to restore “pay as you go” rules into the budgets in ’07 and ’08, the same Republicans that are now worrying about the deficit were then claiming that “deficits don’t matter.”  (Of course, they also claimed that there would be no more downturns in the market and that they had created a “permanent Republican majority.”)

I am not saying that high taxes cannot be bad for both individuals and an economy as a whole.  Progressive taxation has to be well thought out and take context into account:–there’s a reason that Obama is letting the Bush tax cuts on the wealthy expire in 2011 rather than repealing them now–namely, that he hopes the recession will be over then.

Nor am I saying that all Democrats are economic geniuses and all Republicans economic idiots.  Nor that everything is perfect (far from it!) with Obama’s stimulus package and first proposed budget.  There is plenty of room for constructive criticism–and not just from the left as I tend to give it.  If the GOP have truly workable alternatives, they should propose them. 

But the following claims are simply false:

  • Tax cuts are always good for the economy. (In recessions, tax cuts tend to be saved and so do little to stimulate the economy.)
  • Cutting taxes for the wealthy benefits everyone because it creates wealth that “trickles down” to everyone else. (Income inequality has grown by leaps and bounds since 1981. Some economists have compared it to having every middle class taxpayer hand over $10,oo0 per year to the wealthiest 1%–redistributing wealth upwards.)
  • Government spending is inherently wasteful.
  • Government spending never creates jobs.
  • Republicans are more fiscally conservative than Democrats.
  • Deficit spending is always bad.  (Every business knows that it needs to go in debt from time to time to retool or to invest in improvements that will increase profits down the road. Likewise, nations sometimes need deficit investment in jobs, infrastructure, education, energy, the environment, etc.)  It IS true that deficits should be monitored and not allowed to get too big for too long.  During recessions or depressions, when government must go deeper into the red in order to restart the economy, it should also take steps via the tax code or other mechanisms to be able to quickly reduce the deficit once recovery begins.

February 27, 2009 - Posted by | Uncategorized


  1. Excellent, excellent. Yes, yes, yes.

    Comment by Dan Trabue | March 2, 2009

  2. Good points are made in this article.. I would invite yoiu to continue to spread the message and ask that you allow me to help if I am needed down here in Louisiana

    Comment by DeWayne Guice | August 2, 2009

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