February has been a defining month for the Republican Party. They have revealed that they are willing, in Washington as in Wisconsin, to place politics above people and exploit both real and manufactured fiscal crises to pursue ideological ends. The budgetary policies of the Republican majority represent the culmination of a 30 year conservative plan to "starve the beast" i.e. cripple our government as the main mechanism of empowerment for the middle class and those striving to reach it.
Large and unfunded Bush tax cuts took this country off the path of fiscal sustainability. U.S. tax revenue for 2010 will be at a historically low level of 15 percent of our GDP. A midpoint of 20 percent has historically generated the strongest periods of growth in the private sector since WWII. This will require thoughtful but substantial spending cuts accompanied by a return to the tax rates of the 1990s (a time of unparalleled prosperity).
Having starved the government of revenue, conservatives now aim to cripple it. As we saw last week during debate on the continuing resolution, Republicans are seeking to defund environmental and financial industry regulation and programs that educate our youth and improve the lives of the least fortunate. These are being sold as necessary and shared sacrifices due to a fiscal crisis. All the while, they refuse to ask for sacrifices from the wealthiest in our society who benefit the most from a strong military, a modern transportation and communications infrastructure and an educated workforce.
This country does face a long-term structural deficit driven primarily by the rise in healthcare costs and a decline in the manufacturing sector. But in the short term, Hoover-style austerity will only stifle economic development and increase unemployment, making it harder for us to invest, innovate, and grow our economy.
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