Will God forgive America, if the GOP deceives us again?
For who deceives me once, God forgive him; if twice, God forgive him; but if thrice, God forgive him, but not me, because I could not beware. "Tarlton's Jests"
2020, A Scenario -- Romney won the election and Congress passed the Romney-Ryan tax cuts. As with prior Republican administrations, the tax cuts were not funded. By 2020, the Federal Budget reached its tenth year of annual deficits of about 10 percent of GDP, and the National Debt reached over 200 percent of GDP. Eventually, the world refused to accept payment in dollars. Without critical imports, the U.S. economy came to a halt. People couldn't get to work, food couldn't be delivered to stores, unemployment increased to 25 percent in three months, families were starving in the streets, and martial law was declared.
This dystopian future may seem like science fiction. However, something like this scenario is already happening in Greece. And if Romney wins, based on the performance of past Republican administrations and Romney's campaign promises, it is plausible for America.
Romney supports Representative Ryan's tax plan, which reduces personal income tax rates to just two brackets (10 percent and 25 percent). However, even assuming the Republicans implement their significant cuts to the social welfare net, Ryan's plan is short $4.6 trillion in revenues. Romney-Ryan don't deny this $4.6 trillion shortfall, but say the details for closing this gap will be explained after Romney's election.
If Romney (as with prior Republican administrations) passes the tax cuts and doesn't cut government spending -- we'll be on the road to continuous budget deficits of 10 percent of GDP per year, and heading toward national insolvency.
Romney's script resembles what our last three Republican presidents used to get elected. Remember the plot: Republican candidate claims to be a fiscal conservative, denounces 'tax and spend' Democrats, promises big tax cuts, and says Republicans have a magic formula for replacing lost revenues.
Let's look at the numbers for the last four presidents.
President Reagan (1981-1989) cut taxes and claimed his tax cuts would produce growth in tax revenues (they didn't). In addition, Federal expenditures remained approximately constant as a percentage of GDP. Results: When Reagan left office in 1989, the National Debt had increased from 31 percent to 51 percentof GDP.
The first President Bush (1989-1993) followed Reagan's example. In four years, Bush increased the National Debt from 51 percent to 65 percent of GDP. Again, Federal expenditures as a percentage of GDP weren't reduced.
President Clinton (1993-2001) reduced the National Debt from 65 percent to 57 percent of GDP, and turned the budget deficit he inherited (4 percent of GDP), into a surplus of 1 percent of GDP. He also reduced Federal expenditures as a percentage of GDP from 23 percent to 19 percent.
The second President Bush (1993-2001) was frightening. He turned a budget surplus of 1 percent of GDP, into an annual deficit of about 10 percent of GDP. Bush passed major tax cuts for the rich and increased expenditures as a percentage of GDP (from 19 percent to 23 percent). As a result, under Bush, the National Debt grew from 57 percent of GDP, to 80 percent of GDP.
So much for the myth of 'tax and spend' Democrats. It was the Republicans who managed our economy by tax cuts, government spending and saddling future generations with an ever-increasing National Debt (See Charts 1 and 2, below for a summary of these numbers).
Obama hasn't completed four full years, and inherited his first budget from Bush. However, under Obama's leadership, Congress agreed to a real deficit reduction program (the Budget Control Act of 2011). According to the non-partisan Congressional Budget Office: The 2011 Act will reduce the budget deficit by half in 2013, and more importantly puts America on a long-term stable fiscal path that reduces National Debt as a percentage of GDP.
Romney-Ryan are horrified at the Budget Control Act of 2011's tax increases on the wealthy, and budget cuts for the military. They've proposed throwing out this compromise, and replacing it with increases in defense spending and massive tax cuts, which will all somehow pay for themselves, somewhere (somehow) down the road.
The Budget Control Act of 2011 is a compromise. It has lots of provisions I don't like, but it's a real solution to our challenges. As Americans, we should insist the Republicans provide a detailed plan before we abandon this compromise, and not be deceived by promises of painless solutions.
If America is again deceived by the GOP's con game, we will reap what we have sown. And the opening scenario may well be our future.
Follow Steven Strauss on Twitter at: @Steven_Strauss or on Facebook at: https://www.facebook.com/Steven.Strauss.Updates
National Debt and Federal Spending as % of GDP
Note: Budget, National Debt and GDP data are from www.wolframalpha.com unless otherwise noted.
About the Author: Steven Strauss was founding Managing Director of the Center for Economic Transformation at the New York City Economic Development Corporation (NYCEDC). He is an Advanced Leadership Fellow at Harvard University for 2012. He has a Ph.D. in Management from Yale University and over 20 years' private sector work experience.
Follow Steven Strauss on Twitter: www.twitter.com/steven_strauss
Steven Cohen: The State of the Union: The View From America's Front Porch
Richard (RJ) Eskow: A Hidden Economic Ideology: Six Flaws in the CBO's New Report
By the time the right has brainwashed their dupes that up is down, they start rewashing them with the idea that down is really sideways. Before you know it, the GOP will start preaching that socialism and communism is the only way!
And to quote Maya Angelou; "the FIRST time someone shows you who they REALLY are, BELIEVE them."
Again, this article is a good reason to re-elect Obama and to fire the entire GOP.
Stop Perpetual War, that now expands into Syria, on into Iran, directly threatening Russia and China, thermonuclear war is now a reality. The US must stabilize itself. The Wall St. cabal must be indicted, the Fed members must be indicted, the Fed must be placed in bankruptcy protection. Reinstate the Glass-Steagall standard in US banking now. Create the US National Bank that funds the 50 states, then fund the redevelopment of North America as proposed in the NAWAPA plan. Time is running out.
A much better fantasy would be third party president elected, even deeper tax cuts, government becomes highly efficient and effective, most entitlement/social programs ended, social security and medicare permanently fixed, huge budget surpluses, after 8 years the nation debt is retired.
Except it is not a fantasy, but a really doable reality. Also, the end of the highly successful wars on poverty, terror and drugs.
See http://newpoliticalparty.wordpress.com/
Censorship is evil.
"Reagan...cut taxes and claimed his tax cuts would produce growth in tax revenues (they didn't)."
Lie #1
Government revenues: 1981 = 1.015 trillion / 1989 = 1.822 trillion
http://www.usgovernmentrevenue.com/total_revenue_1981USbn
"[Bush 41] followed Reagan's example."
Lie #2
Bush raised taxes.
"[Bush 43] turned a budget surplus of 1 percent of GDP, into an annual deficit of about 10 percent of GDP."
Lie #3.
Dubya left office with a deficit of around 4% of GDP. Obama and the Dems enacted the FY 2009 budget in April 2009 with the first of a series of 9% to 10% GDP deficits.
"Bush passed major tax cuts for the rich..."
Lie #4
The heavy majority of benefits of the Bush 2003 tax reform went to the middle class. Whenever CBO calculates the impact of returning the higher Clinton tax rates for all and for just the top $200k as Obama wishes, the latter brings in a fraction of the tax revenues of the first.
"...and increased expenditures as a percentage of GDP (from 19 percent to 23 percent)."
Lie #5
Once again, Obama and the Dems enacted the FY2009 budget, not Bush. Bush increased spending from 19% of GDP to 21% of GDP. The leap from there to 25% of GDP occurred under Dem budgets.
http://swordscrossed.org/node/1671
In reality, tax revenues surged into double digit growth after the Bush 2003 tax reforms and the deficit fell until the mass default of the subprime home mortgage market tanked the economy.
* Inflation was responsible for a 36% increase in Federal revenues. IOW, to buy the same goods and services in 1989, it took 36% more dollars than in 1981.
* Population increases added a further 8.5% increase. Almost 11 people were paying taxes in 1989 for every 10 doing so in 1981.
* Reagan raised taxes every year after 1981, further increasing Federal revenue. This speaks for itself, doesn't it?
When combined, these easily-checked factors make the conclusion that tax cuts increased revenues extremely suspect and doubtful.
Inflation does that. What possible relevance does this have to the fact that tax revenues increased by over 80% during the Reagan administration after the tax reforms?
"Population increases added a further 8.5% increase. Almost 11 people were paying taxes in 1989 for every 10 doing so in 1981."
The increase in employed taxpayers was actually far greater than that. This is why less punitive tax rates more than pay for themselves.
"Reagan raised taxes every year after 1981, further increasing Federal revenue. This speaks for itself, doesn't it?"
Reagan's tax rate reforms far, far, far outweighed the half percent increase in SS taxes and the reduction of loopholes.
This article also assumes that business will not respond to a Republican victory--and the consistency and predictability it will bring in--by starting to create jobs.
In short, this article is nothing but a scare piece calculated to rile up an already thoroughly riled base.
wait....wait...I forgot....Conservatives rewrite history, not learn from it....
Corporations have recorded record profits since Obama was elected, to believe they're not hiring because they fear the communist takeover of 'merica, or whatever it is you're suggesting, is not reality-based.
http://www.skymachines.com/US-National-Debt-Per-Capita-Percent-of-GDP-and-by-Presidental-Term.htm
Except that Obama is wrongly credited by the right for Bush's impact on the deficit for FY2009. The recession that Reaganomics brought about is the largest single factor in the increase of debt and deficits in the last 3 years.
Republican 'stink' over raising the debt ceiling was only another way to oppose the black president in their stated goal to defeat him as their top priority. The increase in debt ceiling was required because Congress had committed the expenditures that made it necessary, and Republicans refused to sunset the Bush tax cuts to the wealthy.
Every President who takes office inherits his predecessor's economy. GWB inherited a tanking economy from Clinton, Reagan inherited a bad economy from Carter, Clinton inherited a languishing economy from Bush 41. Its not what they start with, its what they do with it. Reagan, Bush, and Clinton all turned around faltering economies with in a year or two after taking office. Obama is in his 4th year and there is no relief in sight.
Democrats' plan is just as bad.
In fact, as long as both parties are ok with Ben Bernanke's unlimited bailout policy of TBTF, then any plan that relies on a bankrupt system of collecting taxes to make massive investments is bad too.
Only by first restoring Glass-Steagall, which would bankrupt Wall Street/City of London, could any "stimulus" or "jobs plan" be worth trying.
The point is, the global financial system is hopelessly bankrupt but because hope-is-stronger-then-fear, then the cartels of international criminal banksters can use puppets peddling hope-n-change.
Hope-n-change always, and I mean always makes the SUCKER doble-down.
That's why Wall Street/City of London gets away with so much - because of the American SUCKER always falling for hope-n-change (me included),
The next president always is the one who can peddle hope-n-change the best to SUCKERS.
Since legislation is the key the most pressing changes are the ones that need to be made to reform the political system. The manner in which we vet out leaders is deeply flawed and the debt to GDP ratio is a reflection of this.
When the legislative and executive branches are no longer luxury liners floating in a sea of cash we may see progress. I'm thinking that might be slightly after massive civil unrest but somewhat before Thunder-Dome.