Trickle-Down Economics Doesn’t Work, So Why Do Republicans Keep Trying It?
When Donald Trump became president it was easy to predict what he was going to do. He was going to give tax cuts to the rich, which would explode the deficit. And that’s exactly what he did. That’s what Republicans have been doing for the last 40 years. The real question is, how long are Americans going to keep letting Republicans fool them into believing that supply-side economics works?
President Ronald Reagan tried this during the 1980s to disastrous effect. We’re still feeling the effects of Reaganomics. But this has happened again and again. Now, a Republican administration is back in charge, they’re trying the same failed policies. Trump gave the rich a huge tax cut and increased the deficit by $1 trillion. Reagan caused the national deficit to swell from more than $900 billion to $2.85 trillion.
This has become a pattern. Republican administration comes in, slashes taxes, approves massive military budgets and leaves a financial mess. Then the Democrat comes in and has to raise taxes and cut benefits to try to clean up the mess. It happened with George W. Bush, who approved the bone-headed decision to start two wars, which cost $2.4 trillion, and slash taxes. (According to Nobel-prize winning economist Paul Krugman this has never happened in recorded history!) Then President Barack Obama had to come in, raise taxes and cut the budget to pay for it. Now Trump is doing the same thing.
According to liberal talk show host Thom Hartmann, this is deliberate. The Republicans do this to hobble future Democratic administrations. They run up the budget to create a mess for future Democratic presidents. When they get in, they’re in such a bind they have to cut back on popular programs, such as education, healthcare and other social services, to pay for the GOP-created mess. And they also have to raise taxes, which raises they ire of their voters.
These kind of tax policies seem to ignore the nature of the American economy. America is a consumer economy. According to the Balance, which cited statistics from the Bureau of Economic Analysis, consumer spending is expected to make up 68 percent of the economy in 2018.
What drives the American economic juggernaut is the fact the public is encouraged to go out and buy stuff. If you grew up in America, you probably don’t notice this, but American consumers are constantly encouraged to participate in spending sprees.Valentine’s Day, Spring, Summer, Back to School, Halloween, Thanksgiving, Christmas, and then it begins all over again.
But that’s what’s drives the economy. And the people who do the bulk of that spending are the working/middle class. They spend every cent they make. And in many cases, they overspend because their salaries don’t meet their basic needs. That money’s spent on food, clothing, transportation and various debts. If you give middle class people a tax cut, they’ll put it right back into the economy.
But if you give wealthy people a tax cut that doesn’t happen. According to Republican ideology, if you give tax cuts to the rich, they’ll start up businesses. But starting up a business is risky. It’s much safer to leave your money in the bank or put it in an overseas account. Plus, wealthy people don’t spend the bulk of their money on consumer goods. A working stiff, who buys a new or used Toyota Camry every three years and drives 20,000 miles per year, probably adds more to a consumer economy, than a wealthy person, who buys a new Bentley every five years and only drives to the country club and back.
But there might be light at the end of the tunnel. Trump supporters are finally waking up to the fact they’ve been sold a lemon. The first round of Trump tax cuts haven’t trickled down to working people.
In a VICE News interview, Erich Collins, a Trump-supporting steel worker, expressed his frustration.
“I’d like to have him have a sit down with the CEO and tell him to stop being an assh*le,” he said. “And this isn’t what I gave the tax breaks for, so guys like only him can benefit and reap from what we sow.”
After almost 40 years of this nonsense, we should have figured out that this doesn’t work. The definition of madness is doing the same thing over and over again and expecting different results.