It is virtually impossible to separate economic policy from social policy. What the government does with its money can change personal income, quality of life, and levels of individual freedom across all income levels.
There is an argument to be made for the real issue of the 2012 elections. It is not the economy, it’s the question of what the government’s role should be in social engineering through tax and entitlement policy.
When you cut through the political rhetoric and just look at the numbers, it’s clear that the Romney-Ryan budget is more than an economic plan. It changes the very fabric of American society.
The only government spending that the Romney-Ryan budget leaves intact is defense. The balance of Romney-Ryan budget calls for more government worker layoffs, cuts to health care, entitlement programs, education and the environment. The cuts are so extremely deep, millions of middle class, poor, disabled and elderly people will fall into deep poverty.
There has been an absence of Republican talking points on what happens to all these people when they wake up one day with polluted air and water, without Medicare, Medicaid, Social Security, or for young people, a chance to get a college education.
Even the Republicans who are promoting severe austerity measures must realize that cutting government spending and entitlements by one-third will have serious social and economic consequences.
If, for example, the government were to raise minimum wage to $12 an hour. Working class people could spend more, thus adding cash flow to the economy. With enough consumer spending, business profits would increase, as would demand for more workers. The economy grows as the laws of supply and demand demonstrate.
Now lets say Congress uses its power and influence to lower minimum wage to $3 an hour. Millions of workers can no longer pay the rent and they fall behind on their cell phone and credit card payments. Businesses start to lose money from bad debts so they have to layoff workers to make up for the difference and protect profits.
At the same time, the Romney-Ryan budget reduces federal revenue through additional tax cuts for the wealthy, and tax increases on the middle class and poor. Under the Romney-Ryan budget, the Earned Income Tax Credit for low-income workers disappears.
Trickle Down Economics
According to Republican theory, giving more to the rich is supposed to give them so much wealth that they will turn around and give it to everyone else through higher wages, more job creation, and better worker benefits, like health insurance and pension plans. So theoretically, the low income worker will no longer need an Earned Income Tax Credit because his wealthy employer is now paying workers so much money, they exceed the poverty level earnings they once endured.
But wages and benefits did not rise with record corporate profits.
“Corporations want to keep American workers in low paying jobs without unions, so they can wield they power over workers without any accountability. And if corporations can make more money by going off shore to countries where they pay workers $2/hr, they will do it. There are no incentives to keep them here because the tax loopholes favor outsourcing,” Citizen Journalist Dava Castillo commented on Allvoices.
The tax code has historically been used as a tool to change income distribution, sometimes with disastrous results.
Pulitzer Prize winning economist Joseph Stiglitz said it is “no accident that the current recession, like the Great Depression, was preceded by large increases in inequality,” according to Vanity Fair. “When too much money is concentrated at the top of society, spending by the average American is necessarily reduced—or at least it will be in the absence of some artificial prop.”
Conservatives are either completely blind regarding the data of failed trickle down economics, or they are hiding their true agenda to use economic policy as a tool for radical social engineering.
“Voters may say that they oppose big government, but the programs that actually dominate federal spending — Medicare, Medicaid and Social Security — are very popular,” Economist New York Times. “So how can the public be persuaded to accept large spending cuts?”said in the
Krugman calls Republican economic and social engineering policy, “bait and switch.” It’s a conservative plan that has been evolving since the 1970s based on a ‘starve the beast’ philosophy.
If government is demonized, it can be "starved’\" of tax revenue by continually reducing taxes. People are more easily frightened by claims of imminent collapse from debt, so they are less likely to complain when funding is cut from entitlement programs like Social Security, Medicare and Medicaid.
In fact, the Republicans are correct. The only way to sustain America under proposals of massive tax cuts for the rich, would be to cut just funding to nearly all domestic spending and entitlement programs.
The vacuuming of cash from the pockets of all but the rich is unsustainable.
So what does the pursuit of an elitist agenda through demonizing then starving the U.S. government of revenue really accomplish?
If the flood of money from right wing-funded Super PACs achieves its goal of complete Republican control of the White House, Senate, and House of Representatives, we are all going to find out together.
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