11/15/2008 05:12 am ET Updated May 25, 2011

McCain Is Not Bush? - The Failed Economics of Reagan, Bush and McCain

If John McCain wants us to think he's not the same as George Bush, perhaps he should stop embracing Bush's policies.

This election should be about one thing: a vision for the future of the American economy. All other issues, domestic and foreign, are dependent on this vision. For close to three decades, that vision has mostly been a Republican one and John McCain promises to continue the "trickle down" economic policy which has been a disaster for America. Barack Obama cannot repeat that sentence enough. John McCain promises to continue the "trickle down" economic policy which has been a disaster for America. That reason alone makes him enough like George Bush that all voters, rich and poor, must reject the notion of a McCain presidency.

Big spending Republicans

It all began in 1980 with Ronald Reagan. Although Reagan promised to cut spending, he never did. Instead, he cut taxes for the rich and increased spending. George W. Bush did the exact same thing. Yes, folks, as much as Republicans would like to tag Barack Obama and Democrats as big spenders, it's Republicans who have been America's biggest spenders. It's not even close.

In fact, since 1945, when Republicans have been in charge of both the White House and Congress, they have never, not once, reduced spending. To make matters worse, since Reagan, Republicans have become big borrowers. Imagine what would happen if you ran your household that way, by spending money you don't have and continually spending more. "Borrow and Spend" is a lot uglier than "Tax and Spend."

And what did they do with all of this spending? Did they help out average Americans? Do something for education or hungry people? Help with housing, rebuild inner cities, start anti-crime programs for inner city kids or help provide health insurance for poor kids in coal mine towns? Did they stabilize Social Security or Medicare? Nope. Their giveaways were aimed at the richest 1% of this country while they spent lavishly on war. They managed to bust the budget while decreasing spending on social programs.

Nothing trickles down
The basic argument for their policy is if you give tax breaks to the rich, that money will eventually "trickle down" to the middle and lower class. It doesn't. All you need to know to discount this theory is simple logic. Wealthy people already have spending cash. Any additional sums they get will not likely increase their spending by much. On the other hand, give cash to the lower classes and they will probably spend it all. If you want to revive an economy, get money into the hands of the poorer people, not the richer ones. Trickle Up. Now that's a plan.

As to the notion that corporations will hire more people when given special tax treatment, the amount of hiring is not dependent on tax breaks, it's dependent on how well the business is doing. If their business is booming, Exxon will increase spending whether or not they get tax breaks. On the other hand, if they get tax breaks and the oil business is on the rocks, they'll just stuff that cash in their CEO's mattress.

Republicans run up the debt

The failure of "trickle down" is in the numbers. Ronald Reagan ran up a bigger debt than every president before him combined. The budget deficit exploded under his leadership and the national debt tripled. In fact, despite a slight flattening of the national debt during the 8 years of Clinton's presidency (actually the debt declined as a percentage of GDP), the debt has grown from under $1 trillion before Reagan to over $10 trillion after George Bush! And, yet, with all of this spending, we still don't have national health insurance and Social Security is more endangered than ever.

At first, what Bush and Reagan's policies were really effective at was to make rich people richer and poor people poorer. But there is evidence that, in the end, the policies just make everyone poorer.

Class warfare GOP style

John McCain claims Barack Obama has some sort of ominous plan to redistribute wealth. But the real goal of Obama's tax policy is to restore fairness in a tax system that has already shifted most of the wealth in the nation to a tiny percentage of privileged people. Just as Al Gore told us it would in 2000, the result of Bush's tax cuts was that the wealthiest 1% of Americans saw their after tax income increase by 20%. It was the largest increase since, you guessed it, Ronald Reagan was president. Further, by 2005, the top 1% received its largest share of gross income since 1928, the year before the start of the Great Depression. Turns out that a tremendous imbalance between the haves and have nots is not good for anyone, including the haves. Why is this? As I stated before, the lower classes need to be spending their money to support the economy and if they don't have any money, well...

Then there's the issue of deregulation. Is it a coincidence that we had the Savings and Loan crisis on Ronald Reagan's watch and another bank crisis on Bush's? "Trickle down" doesn't work. Yet Republicans keep trying it. Why? Greed. In the short term it makes rich people richer so those rich people contribute mightily to Republican candidates. But even they suffer in the end. Too bad they can't connect the dots. But, if you do, you'll see those dots draw an outline of John McCain and it looks very much like George W. Bush.

Read what America's wealthiest man, Warren Buffett, and wealthy conservative Republican Ben Stein say about "trickle down" by clicking here

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