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Why Republican Economic Ideas Won’t Work

  • by
  • November 10, 2011
  • 12:00 pm
Why Republican Economic Ideas Won’t Work

Everyone knows that there is an economic crisis right now — unemployment is high, consumption is down and families are hurting. President Obama has already unveiled a plan that would add more than a million jobs in a year, but Republicans keep on stalling it in Congress. Last night in their debate, the frontrunners for the Republican presidential nomination had the opportunity to unveil their economic plans — with middling results. Besides the usual deluge of misstatements and factually incorrect assertions, the ideas that these candidates proposed make very little sense and would do more harm than good.

A big fad among the candidates right now is the idea of a flat tax. Herman Cain called for a 9-9-9 plan, Rick Perry has proposed a flat tax, and Romney said last night that he would “like to see a flatter tax code.” What does a flat tax mean? It means that taxes go up for everyone… except for the super rich. Essentially, the poor and middle class subsidize tax cuts for the wealthy. So each time someone said they wanted a “flatter” tax code, what they’re really saying is that they want to raise almost everyone in the country’s taxes. Cain’s plan is actually regressive — meaning that it has higher tax rates on the poor than the rich — because sales taxes hurt poor people more than the rich. And this is somehow supposed to make more jobs and help struggling families.

Another centerpiece of every economic “plan” that Republican candidates put forward was getting rid of regulations and cutting taxes. Newt Gingrich said that the two most recent and biggest periods of growth — the early 1980s and the 1990s — were the result of those twin policies. The rest of the Republicans argued that right now is a time of high taxes and high regulations. Given that Newt doesn’t let anyone forget that he was a history professor, you’d think he’d have studied his subject a bit harder.

Firstly, there’s no correlation between tax cuts and economic growth, and today’s tax rates are actually the lowest that they’ve ever been. But what’s with all this talk of regulation? The Republican candidates seem to think that the Obama administration is passing so many new regulations that the economy can’t keep up. This is pure rubbish: Obama has actually enacted fewer regulations than George W. Bush, of all people. And his regulations aren’t especially costly — they’re only slightly costlier than those of Bill Clinton and they’re less expensive than those pushed by George H. W. Bush.

It also turns out that businesses and “job creators” don’t really mind regulations: when asked, they (for the first time in recent history) repeatedly rank it lower as a less important problem than other economic indicators. In case you were curious, international businesses rank the US as the fourth best country in the world to do business, specifically because of our low-tax and regulation climate. On top of that, of all of the layoffs that have occurred in the past few years, no more than 0.4% of them are due to regulations.

So what gives? The fact of the matter is that the Republican economic plans can’t actually do anything to upstart the economy because they aren’t addressing the fundamentals. What caused the crisis — rewarding Wall Street malfeasance and greed instead of hard work across all sectors — has yet to be addressed, and Republicans actually want to exacerbate these problems by deregulating banks even more. Instead of addressing income inequality and growing the economy by providing assistance to the 99%, the Republican candidates have doubled down on the 1%.

Related Stories:

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Photo credit: nmfbihop's Flickr stream.

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218 comments

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5:49PM PST on Dec 1, 2011

Republicans got us in this mess and are keeping us there..plain and simple!

8:54AM PST on Nov 14, 2011

Her 98% figure is totally made up which is fine. She is just here to poke sticks…not add anything of value. I am done with her.

7:15AM PST on Nov 14, 2011

The right wing disdain for facts never ceases to amaze me. For a group that claims to love our country more than the rest of us do, they hurt it with their policies and hate filled rantings.

The Bush/Cheney administration should have removed all doubt that the remove regulations/lower taxes theory of economic growth has been shown not to work. We tried it. It failed us.

The Clinton pay as you go, raise taxes a bit if needed, save $100s of billions on military spending because of the "peace dividend" (no more Soviet Union after 1991) method resulted in unemployment under 4%.

The last time we saw unemployment that low? When a moderate Republican(clearly an endangered species) named Eisenhower taxed the rich, and used the proceeds to build our interstate highway system.

So as more and more people start to see this, they blame the messenger. You know, the "main stream media." Which someone here has astutely pointed out includes FOX! They also overlook that NBC is (now part) owned by "pay zero taxes" GE. ABC by the conservative Disney corporation.

If anything we're slowly, painstakingly getting the facts out to the public despite the main stream media!

7:37PM PST on Nov 13, 2011

is try reading the post. Obama admin controls PART of the media and 98% just plain ol hate Republicans so thy parrot his admin and give him leeway. Pay attention to every word in the post. Lol, Rupert Murdoch? Who has more power, Murdoch or Soros?

David, I don't pay attention to Limbaugh other than laughing about his continued arrest. Beck? Who cares?

See what.I mean about having an original thought?

David-

5:32PM PST on Nov 13, 2011

Robert

On 98% of media anti-Republican, the woman is delusional. The delusions probably also impact her political views. I suppose it's possible she thinks Limbaugh, Beck etc are left of center.

5:23PM PST on Nov 13, 2011

The insane can't properly be held accountable for their actions....however, this group.....politicians....know full well what they do. What's worse they also know they will be held accountable in the future....if they survive so long. Their regulations, de-regulations, raising taxes, lowering taxes, back door deals, raising their salaries while making the rest of the country try to subsist on minimum wages (that is provided we even have a job) and maybe food stamps don't even scratch the surface of all that they have done to us as a nation. They will never come together because there will ALWAYS be one in the bunch who thinks they are better than the rest of us. Gee, sounds like those in congress. And if there are those who truly try to work together for the good of all....what happens to them? They get tossed aside as the crazies or trouble makers. I think we need more trouble makers as these. What did they used to call them? Oh, yes....they were the American people that actually had a backbone that would stand up against garbage such as this being done to them. They are not extinct yet according to the census. I guess it will take more time for U.S. to get disgusted with this same type of treatment that we received before we ever arrived on these shores. Hopefully, not too much more time. We just don't have any more time to spare.

5:11PM PST on Nov 13, 2011

ahhhhhhhhhhhhhhh IC so Fox News is not a news organization as some have touted.

4:14PM PST on Nov 13, 2011

Robert, I said that 98% of news media is anti-Republican.

That's right,.Lizzie. You have a problem with that?

3:23PM PST on Nov 13, 2011

You DO realize, BY DEFINITION, Fox News and talk radio are MSM right. Its plain silly to say Obama controls 98 %

1:40PM PST on Nov 13, 2011

Damn straight, Lizzie. For someone who pays attention to facts and history and comes up with such crap, well I learned a long time ago you can't debate the dumb or the ones cemented in their beliefs. I do do it with you sometimes though, because I consider us secret friends. And it seems you finally got my name right. Brava.

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