Back in the Day–1980 to be precise–GOP presidential candidate George H.W. Bush referred to fellow candidate Ronald Reagan’s “supply-side” financial theories as “Voodoo Economics.” He was correct. He went on to join the Reagan ticket, became Vice President and then President and so much for his critique of Reagan’s policies.
Today we’re living with Republicans whose economic philosophy amounts to Reaganomics-on-Steroids, and there are probably not enough pejoratives to accurately describe their notion that tax cuts for the wealthy and spending cuts in services everyone else depends on are good for a society trying to crawl out of the worst recession since the Great Depression of the 1930s.
Cut spending. Cut spending. Cut spending. Cut spending. That is the Republican formula for solving the economic crisis that has been decades in the making.
Many economists and scholars are concerned that the reduction in government spending being pushed by Republicans in Congress and their Tea Party constituents will only make matters worse.
Princeton University professor Paul Krugman said the GOP predictions that their plan will spur an economic recovery: “depends an awful lot on unicorn sightings.”
This is the backdrop for the budget drama last week which came within an hour of a complete government shutdown, and the furlough of 800,000 workers.
The GOP histrionics managed to cut more than $78 billion from the fiscal year 2011 budget, a whopping 2 percent of the $3.8 trillion yearly spending. That’s a neat trick since the budget years is already six months down the road, and since the area from which the cuts were drawn amounts to only 10 percent of the total being spent.
The deal Republicans extorted from the White House and Senate Democrats amounts to the largest annual spending cuts in
The government shutdown would have disrupted federal operations across the country and around the globe, but it would have disproportionately affected Blacks who are 70 percent more likely to work for the federal government than the general workforce, according to the “State of the Dream” report by United for a Fair Economy.
Furthermore, the deal that was approved included two controversial provisions aimed at the
One of the controversial policy “riders” included in the budget deal would prevent the city from using any local or federal money to pay for abortions for low-income residents. The other restarts the “D.C. Opportunity Scholarship” program. It’s a favorite initiative of House Speaker John Boehner (R-Ohio), and the only program in the entire nation (including Boehner’s own home district) that uses federal tax dollars to subsidize private-school tuition for low income students.
But even as negotiators breathed a sigh of relief that the shutdown and devastating furlough of employees was averted, the political reality is that the real budget fight was merely postponed, and not resolved. Within weeks both sides will clash again over the nation’s debt ceiling and the 2012 budget. The annual federal deficit is $1.6 trillion, adding to a debt of $14 trillion that is expected to grow for years to come.
The discretionary spending portion of the budget amounts to only a tiny fraction of the entire budget, because it does not consider military spending, or popular federal programs such as Medicare and Social Security that consume the major portion of government expenses.
My favorite analysis of what just happened, and what House Budget Committee Chairman Paul Ryan (R-Wis.) has proposed for next year comes from Max Wolff, an instructor at the New School University in New York, and a financial adviser to the Rev. Jesse Jackson.
“When youÂ get a guy grand-standing about ‘I know how to save a billion dollars,’ this is a little bit like if you had a family meeting with your whole family, and somebody in the household said ‘I know a way we can save 12 cents a week,’” Wolff told me.
“Alright, on some level, every penny counts, but on another level, a family budget that is moving around by 12 cents a week is not probably going to radically alter the balance of the household, so these numbers are pretty small,” Wolff said.
“The Ryan Report coming out of the House Republicans has some major proposals on slashing social spending, and then it has what I think might fairly be described as Sham-a-lamma-ding-dong about ways to save money on Medicare,” he said.
That’s it for me. Unicorn sightings. Goodbye Voodoo Economics. Welcome to your Y2K grandchild: the GOP Sham-A-Lamma-Ding-Dong-Budget. Twelve cents a week, indeed.