Just how can voters cling to the idea that Republicans are the fiscally responsible party?
Democrats are credited with supporting education and discredited for channeling money to the poor.
But people consider Republicans responsible with public funds.
Maybe it’s a holdover from the Eisenhower administration (1952-60). Facing a stagnant economy, the five-star general initiated an Interstate highway system. Our national defense, he claimed, required connecting the country from coast-to-coast.
Putting a lot of people to work at taxpayer expense and increasing interstate trade were just welcome side-effects.
(For those of you who missed the 1950s, try to imagine that the fastest route from Chicago to Portland ran from Garrety to Caldwell Boulevard to Cleveland Boulevard to Kimball–with cars and trucks crowded into two-lanes no wider than the old metal bridge across the Boise River west of Caldwell.)
Eisenhower became the only Republican to join the ranks of FDR, Truman, and Bill Clinton in creating a midterm budget surplus. (Nixon and Bush Jr. inherited first-year surpluses.)
Current Republicans aren’t doing so well. Headlines from last week summarize a new Congressional Research Services report—”A devastating analysis of the tax cut shows it’s done virtually no economic good” and “A new Congressional study finds little economic benefit from the 2017 tax cuts.”
The 18-page CRS report shows that the cuts resulted in a huge increase in the annual deficit and big gains for the richest, but nearly zero increases in wages and U.S. business investment.
Senators Risch and Crapo promised Idahoans the bill would be tax neutral, that growth would accelerate so much that lower tax rates would be offset by having more to tax.
In fact, corporate tax revenue declined $40 billion in 2018. Real gross domestic product was 2.9%, with only 0.3% attributed to the tax cut. The CRS estimates it would take an increase greater than 6.7% to make the cuts tax neutral.
These numbers differ drastically from those promised by Sen. Crapo. His website predicts that productivity would increase an additional 2.9% annually and that would be enough to increase revenue $1.8 trillion over 10 years. (Those numbers from the U.S. Treasury Department appear completely based on GOP wishful thinking. )
The CRS has history on its side: current results are essentially identical to those of the budget-busting tax cuts of 2004–when similar claims by Crapo were shot down.
It’s hard to believe he’s forgotten.
According to the Committee for a Responsible Federal Budget, without that tax cut this year’s deficit would have been $360 billion rather than the predicted $1 trillion.
Yet, our senators boast of their fiscal responsibility.
Just what did companies do with their tax cuts that didn’t boost the economy? They bought back stocks to increase the value of each share still out, making millions for executives and major investors.
How could anyone–much less a majority of Congress–expect companies to build new enterprises and create new jobs during a labor shortage?
Wages overall increased a paltry 2%, but less—-only 1.2%–for production and nonsupervisory workers. That’s less than the growth in productivity.
I’m guessing what new investments companies made were in automation.
According to a 2017 CBS News Poll, a two-thirds majority of voters were smart enough never to believe the Republican promises. They saw the tax cut for what it is–a handout to the wealthy.
And enough switched their votes in 2018 that the Democrats took a majority of the U.S. House.
Can we hope that Idahoans get tired of Republican raids on the national treasury and take a hard look at their pie-in-the-sky promises?
Note this editorial by Judy Ferro published by Idaho Press – 2019