This continues the summary of my economic presentations.
Reaganomics is the fine art of giving handouts and tax breaks to the wealthy, saying with a straight face that deficits will shrink and everyone will get richer because more money will “trickle down” and get spent, boosting the economy. In reality, deficits shoot up and nothing trickles down to the worker bees, who instead work harder due to union-busting.
The money does not “trickle” anywhere. My audiences see it gushing, gushing down to the Cayman Islands, a tax haven. But money stashed in tax havens by the wealthy is neither taxed and spent by Uncle Sam, nor paid in wages and spent by consumers.
Fully 70 percent of America’s economy is driven by consumer spending. It is therefore important for consumers to get money. Business Insider tells us how: “Most consumers work, so another name for them is ‘employees.’ ” But Republicans, beholden to their donors, want starvation wages. These corporate donors are notoriously short-sighted. Henry Ford famously sold far more cars after he doubled wages.
Conversely, low wages throttle America’s economy — and you with it.
Consider this: McDonald’s workers in Denmark earn $45,000 a year with benefits. No wonder Denmark is often the world’s happiest country. Yes, the cost of a Big Mac is 25 cents extra, but Danes pay it gladly. It is cheaper than subsidizing McDonalds via taxation.
In contrast, America’s taxpayers subsidize fabulously profitable companies. Their workers are so miserably paid that they need welfare. Hence, taxpayers like you subsidize billionaires who could easily pay livable wages. Walmart alone is subsidized over $6 billion a year (Forbes). This is socialism for the wealthy.
Our second economic problem is low taxes. Amazon paid zero federal taxes in 2017. By international standards, taxes here are very low. Americans are conditioned to hate taxation. But taxes do not vanish into a black hole in outer space. They are spent here on earth. In fact, government spending is 21 percent of the economy. Taxing the wealthy unlocks America’s idle money and puts it to work (See: Interstate Highways, 1950s). Simply put, low taxes on the wealthy throttle America’s economy — and you with it.
Third, government spending far outstrips its income (See: bloated military budget). Uncle Sam therefore borrows money. We used to pay it back routinely. That stopped with President Ronald Reagan. When President Barack Obama took office, a staggering 70 percent of all national debt had been run up by three Republican presidents. Over half of today’s national debt was produced by their ruinous wars and socialism for the wealthy. Simply put, Republicans run wild with Uncle Sam’s credit card and stick your kids with the tab.
President Donald Trump’s 2017 Tax Cuts and Jobs Act will load $1.9 trillion on to national debt (Congressional Budget Office) as further socialism for the wealthy. They will receive 83 percent of the swag (Tax Policy Center). By 2028, nearly $1 trillion will be forked over for interest alone. To finance this, courtesy of the “Tax Scam Act,” dearest reader, your taxes will soon GO UP.
Republicans played Americans for fools. Rep. John Yarmuth, D-Kentucky, said: “Speaker Ryan told us the GOP tax bill would help companies like Harley-Davidson hire more workers. So what’d the company do once it became law? Bought back $700 million in stocks, fired 800 workers and opened a plant … in Thailand.”
Even Sen. Marco Rubio, R-Florida, has admitted that workers will not benefit from Trump’s con job. He told The Economist: “There is still a lot of thinking on the right that if big corporations are happy, they’re going to take the money they’re saving and reinvest it in American workers. In fact … there’s no evidence whatsoever that the money’s been massively poured back into the American worker.”
Republicans should have increased taxes on the wealthy. They are irresponsible. Democrats are the party of fiscal responsibility. To quote David Stockman, the architect of Reaganomics, no less, “The debt explosion has resulted not from big spending by the Democrats, but instead the Republican Party’s embrace of the doctrine that deficits don’t matter if they result from tax cuts.”
Republican tax cuts for the wealthy achieve nothing. Economist Thomas Piketty concluded in his famous book Capital In The Twenty-First Century: “The U.S. has not grown any more rapidly since 1980 than Germany, France, Japan, Denmark or Sweden. The reduction of top marginal tax rates and the rise of top incomes do not seem to have stimulated productivity (contrary to the predictions of supply-side theory).”
Simply put, the numbers prove the worker bees get nothing from Republican socialism for the wealthy. Trump himself even said, “The economy does better under the Democrats than under the Republicans” (CNN, March 21, 2004).
Ask Rep. Steve Knight, R-Palmdale, why this is so. Try to keep a straight face.