Thursday, September 15, 2011

Republican Strategy: The Two Santa Claus Theory

In order to understand the current political landscape, one must understand what the long-term strategy of the Republican party is. By now, it should be obvious that the GOP is only interested in power and that they are willing to throw this country under the bus in order to take back the White House. So, let's go back to 1974 to understand the big picture. If you analyze government spending and the national debt by President, you will see that the national debt is actually mostly attributable to Republican presidents, starting with Ronald Reagan. Why is that? Simply put, the two Santa Claus theory.Thom Hartmann, radio host and prolific author, wrote this comprehensive article on the Two Santa Claus Theory a couple of years ago, so you can read in its entirety, but here it is in a nutshell.

Democrats care about people. They believe that in this great nation, we should work together to help others. They put in place hugely popular programs like Social Security that have greatly reduced poverty among the elderly and ensure that widows and the disabled have a safety net. They structured Social Security in such a way that ensures it is a sustainable program. We each pay into the program through payroll taxes, and when we reach retirement age, we draw benefits. Even though the Republicans have been screaming that Social Security is bankrupt and in crisis for years now, the fact of the matter is that it is an extremely successful program that has never missed a payment and can pay 100% of benefits for next 20 or so years. If we implemented the simple fix of raising the cap on those payroll deductions so that those making over $106,000 continue to pay, it would be solvent forever. But I digress. Because Democrats care about people and put in place programs that actually help people, Republicans think of them as the first "Santa Claus".

The Republicans realized that they could never be as popular as the Democrats and needed to come up with a way to also be a "Santa Claus". Thus was born the mantra of cutting taxes. Cutting taxes is how Republicans are Santa Claus. And because they believe in supply-side economics, which absolutely does not work, they theorized they could increase spending too - just not on those social programs they hate. As Thom Hartman writes:
Republicans could be double Santa Clauses by cutting people's taxes! For working people it would only be a small token – a few hundred dollars a year on average – but would be heavily marketed. And for the rich it would amount to hundreds of billions of dollars in tax cuts. The rich, in turn, would use that money to import or build more stuff to market, thus increasing supply and stimulating the economy. And that growth in the economy would mean that the people still paying taxes would pay more because they were earning more.
Of course, since supply side economics doesn't actually work - revenue does NOT go up when you lower taxes - huge deficits build up under Republican presidents contributing to over 2/3 of the national debt.  They actually took advantage of this with a new twist - "starving the beast". This strategy seeks to hamper Democrats' ability to play Santa Claus when they are in power by running up huge deficits and then when Democrats come into power, forcing them to be the mature, responsible ones and rein in spending and raise taxes to put things back on track. Does this sound familiar? It should. When George W. Bush was in office, I did not hear one peep from Republicans about deficits or debt, did you? But the second President Obama took office? Here comes the Tea Party screaming about cutting spending, lowering taxes, the national debt and on and on.  The same thing actually happened with Bill Clinton as well. He balanced the budget and implemented welfare reform. Remember,  he handed a budget surplus to George W. Bush, who quickly got rid of it by giving huge tax cuts to the wealthy and spending billions on the unnecessary war in Iraq.

So there you have it. The Republicans have been playing this game for years, and it seems to be working like a charm right now.

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