For over a week now the political left has been grumbling over the president’s decision to compromise with republicans in the House and extend the Bush era tax cuts for another two years. While extending tax breaks to millionaires while the country wallows in massive debt and high unemployment is certainly frustrating, it was a necessary decision the president had to make in order to not only extend unemployment benefits for another 13 months, but to pass any legislation whatsoever. The republicans had vowed to block any new legislation, including legislation meant to benefit 9/11 first repsonders, until the tax issue had been resolved.
Elected on a mandate to reign in federal spending, the republicans quickly showed their true colors, and granted their most powerful constituency a huge gift that is neither deserved nor warranted. By extending these tax cuts to the top 2 percent of wage earners in the country, the republicans effectively added another 700 billion dollars to the already massive debt. And while the tax breaks will also benefit middle and lower class Americans, it is not the huge windfall that the already rich will enjoy.
Republicans argue that raising taxes during a depression is foolhardy, and that the extra money the rich will now keep will help them provide more jobs and drive an economic recovery. The fact is, however, that the trickle down economic theories of the conservative right have never worked very weil. Whether attempted in South America, Eastern Asia, Western Europe, the Middle East, or the United States, the theories developed by the Chicago school of economics have lead to massive debt, higher unemployment and (in the worst cases) economic collapse. It was, in fact, these same theories of deregulation, outsourcing of government responsibility and huge tax breaks that lead to our economy’s crash two years ago. As former President Clinton once put it, “We went from very creative supply side economics (practiced under President Reagan and President George H.W. Bush) to simple arithmetic.” The result was a simultaneous lowering of the national debt and the lowering of unemployment.
During the Clinton Presidency, unemployment in the United States reached record lows, down even below the 4% frictional unemployment that is caused by people leaving the work force, or entering it for the first time. We were headed in the right direction. Our economy was booming and we were beginning to pay off the debt that had grown to 4 trillion dollars. As soon has President George W. Bush took office, however, the trend was reversed. His first major initiative was to give a huge tax break to all Americans, but most beneficially to the rich. By the end of his presidency, the debt had more than doubled. It now stands at about 13 trillion, and republicans seem willing to let it rise even higher to pay off their big money contributors.
While President Obama’s initiatives have raised the debt significantly, he did so to help stave off another Great Depression and reform a health care system that was leaving millions of Americans uninsured. The stimulus package not only saved millions of jobs, but will help revitalize our economy by investing a lot in green energy technology. And the health care reforms will save the government billions in the long term. It was an investment in our country’s future, and we will reap the benefits of it in the coming years.
If those on the left want to blame someone for extending the Bush era tax cuts, blame those who crafted them, and those who forced the rest of us to swallow them–the republicans.
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