Class Warfare Blog

December 17, 2010

Republicans Caught in a Trap of their Own Making

Filed under: Economics,Politics — Steve Ruis @ 4:48 pm
Tags: , ,

The Republican strategy from the beginning of Barack Obama’s presidency has been to deny him as many accomplishments as they can and to muddle the ones they can’t. So, with the health care debate we were distracted with nonsense like death panels, etc. instead of concentrating on things that could have made that piece of legislation better. Most recently Republicans have sworn to defeat a bill to fund the government for another year because the bill was larded with earmarks, earmarks that they themselves had sponsored! They apparently are willing to even smear themselves to deny a legislative accomplishment to the President.

About the only piece of Republican “philosophy” that they stuck to amongst all of their purely political maneuvers was their claim that the only way to help Americans out of the Great Recession and get us back to work was through tax cuts. Granted, economists have disproved this idea over and over—tax cuts are much less stimulative to an economy than just about anything else you could do, including doing nothing.

The Republicans were so adamant about this point that President Obama, when he was almost obsessed with “bipartisanship,” allowed for almost $300 billion in tax cuts to be part of the “Economic Stimulus” package of 2009. Later the Republicans claimed that the Stimulus Bill created not one single new job. So much for tax cuts helping to raise employment.

Now, at the end of 2010, the Republicans decided to hold everyone hostage to make sure that the wealthiest Americans got bigger tax cuts than anyone else. The President proposed that the Bush era tax cuts be extended, even made permanent, for the first $250,000 that everyone earned. For earnings above that level, the marginal tax rate was to return from the current 35% to the previous 39% (what it was the last time the economy was booming). But the Republicans said “No,” if the wealthy don’t get bigger tax cuts than everyone else, then nobody gets to continue at the current lower rates and nobody would get unemployment insurance payments extended, nor would any other government business get done until they decided it could.

So, the President caved and gave them what they wanted.

And thus the trap created by the Republicans was sprung . . . on them.

The Republican leader of the Senate has as his (and his party’s) highest goal to elect a Republican as president in 2012. But now there is a problem. If the Republicans are right and the tax cuts they insisted on get us onto a path to a healthy recovery, they won’t have a poor economy to campaign on. Who will have been “in charge” when everything got better? Why, Barack Obama and he will get the credit and will probably get re-elected.

If, on the other hand, the economy continues in the doldrums, with unemployment still high by election time in 2012, the Republicans one big idea (Tax Cuts! Tax Cuts! Tax Cuts! Yah!) will have been proven wrong and their policies bankrupt. And they will have been the architect of the recovery strategy and the Democrats can campaign on the Republican’s “failed policies and no new ideas.”

Also, the strategy they employed the win such wonderful victories as they did in the mid-term elections, that of denying Barack Obama any successes at all? How will they then blame the failing economy on Democrats, when they were the ones insisting on what was to be done and made such a fuss demanding it that everyone noticed. So, they have undermined their own successful strategy. If they really wanted the presidency back, they should have encouraged the Democrats to “tax and spend” their way to failure and then just stepped in to pick up the pieces when it failed. So, apparently, they didn’t believe they would fail and they didn’t believe they would succeed either and have now they will be damned if the economy recovers and damned if it doesn’t.

The biggest problem in modern politics is the people involved—they are not very bright.



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