Repost From February 2009 – “Is The GOP Actively Courting A Depression?”

For the second time since February 2009, I’m republishing “Is The GOP Actively Courting a Depression?” 

Why? Recently, renewed speculation that this may indeed be the case reminded me that I’ve believed this was the case since the first days of President Obama’s administration. The right wing Republican war to destroy the federal government with an orgy of deficit spending through underfunding it via unpaid for tax cuts has been underway for thirty years, never more, however, than since 2001. Mitt Romney has plans to cut taxes further, again withoout any “pay for.” If a Romney administration succeeds Obama in the White House, its proposed tax cuts will increase the deficit extravagently; Grover Norquist would then be nearly able to drown the federal government in a bathtub.

The big secret is that many think the GOP actually believes the long disproved Laffer curve magic, i.e. that lower tax rates increase government revenue by spurring economic growth. The facts demonstrate otherwise, big time. In fact, the savvier, non Tea party Republicans do not believe the Laffer voodoo. That’s their secret.Like most economists, they too know that government revenues fall when taxes are cut. They’ve always understood that. Yet, long ago they decided that defending tax cuts like George W. Bush’s was their ticket to ultimately starving the government of funds while simultaneously being able to maintain they were doing the opposite.

So, yes, the GOP is courting another, deeper, recession, or, if it gets out of hand, a depression, and they want it to be apparent to the public before November 2012. Then, once in power, they will slash and burn valuable federal programs like Social Security, Medicare, and safety nets back to the Hoover days when the federal government was responsible for very little beyond foreign afairs, military spending, and border protection.

It’s been a long battle back since 1929. Now, they are so close they can taste it. If they win big in November, they’ll point to the body in the bathtub and say, “See, we told you the federal government couldn’t swim.”

So here’s my three year old 2009 article again:

Is The GOP Actively Courthing A Depression?

Feb. 9, 2009.  I’ve often hinted but seldom written of my belief that the GOP ideological strategy that remains within what’s left of the Reagan GOP is now devoted to literally courting an economic depression. This is presently being demonstrated by the almost universal Republican obstruction of the fiscal stimulus plan (H.R. 1). In both Congressional bodies. For example, the GOP offered amendments to H.R. 1 that literally would have stripped Obama’s stimulus plan of any spending whatever, and replaced direct spending with tax cuts and other tax-related provisions. Both measures garnered a vast majority of GOP votes, and no Democratic votes, not even the Democrat’s Blue Dog fiscal conservatives. That GOP plan, remember, would have provided the following amounts for

• increased unemployment coverage . . . . . . . . . . . . . . $0

• aid to states . . . . . . . . . . . . . . . . . . . . . . . . . . .  . . . . . . $0

• infrastructure construction . . . . . . . . . . . . . . . . . . . . . $0

• school maintenance and construction . . . . . . . . . . . . $0

• flood and storm damage reduction . . . . . . . . . . . . . . .$0

and more and more zeroes for more and more vital programs.

Additionally, via its complete reliance on tax cuts, the GOP alternative would cause a massive shortfall in tax revenues and starve essential government services and responsibilities.  Since most Americans actually desire the services that government offers, constricted tax revenues would cause the future federal deficit and national debt to take off like a wingnut from a gay pride march.

Admittedly, these GOP amendments were offered with no chance of passage, but that they were offered at all speaks volumes about the mental status of much of the House and Senate Republican caucus. You can see which Republicans are completely unmoored from Spaceship Reality by perusing their votes here and here on the Senate and House all-tax-cut “stimulus” plans. As Lawrence Summers and President Obama and many others have observed in the last few days, the supply side economic theory (never accepted as anything more than what The-Other-President-Bush labeled “Voodoo economics”) has been tried and found – about $3 trillion – wanting.

The American people, it turns out, actually want a federal government, and, by the way, state and local governments as well. Grover Norquist’s dream of shrinking the federal government to a size where it can be “drowned in a bath tub.”  Most Americans simply want government that works. Defining “works” is, of course, the great game of our times, and the business classes, represented by the GOP, simply operate best, they believe, when they control and provide nearly all services presently offered by governments. They especially prefer deciding which services will be provided to which constituencies at what cost.

Courting Depression. Simply put, I believe the remaining GOP doesn’t wish to see the country recover from this Decession, at least not on Obama’s fiscal watch. Their anti-tax and deregulation agenda have for many years been directed at this seminal moment.

As Naomi Klein might say, they invite a crisis whereby they can then go to the country and proclaim that governmental intervention “doesn’t work,” and that the federal government has, therefore, ceased to justify its existence.

Quickly following would be, they hope, the application of their GOP “shock therapy,” a forcefully and bluntly applied form of outright laissez faire economics, and, ironically for an anti-government party, enforced through the agency of government power via utter and complete business and finance deregulation. Government services that once provided the essentials of a nation, gone. Most taxes. Gone. Services for the poor. Gone. Unions. Gone. Reasonable wages. Gone. Unemployment insurance. Gone. Public health. Gone. Disability rights. Gone. Employee rights. Gone. Middle class. Gone. Social Security. Gone. Pension security. Gone. Medicare. Gone. Medicaid. Gone.

Hidden in Plain View. As I say, they’ve courted this for years, not through back room “conspiracies.” There’s nothing secretive about it. They slyly hid it in the open. The underlying ethic they’ve supported since the New Deal has been designed to whittle away at the care and feeding of government, and people, at all but the wealthiest economic levels. Most GOP administrations or Congressional majorities have sought to govern badly, either by undercutting executive agencies’ budgets, agendas, or ethics;  by staffing them with incompetents, political plants, or individuals downright inimical to the agencies’ missions;  or by privatizing them into nonexistence for their own profit alone.

On the tax side they’ve sought to reduce taxes at every turn in order to starve government functions, and to run government through deficit spending, thereby intentionally creating the resultant massive national debt, now held in great amounts by foreign governments. It should be no surprise that in the last 20 years the GOP “discovered” that “deficits don’t matter.” Ron Suskind reported, for example, that Dick Cheney, once a deficit hawk, told then Bush administration Treasury Secretary Paul O’Neill:

“Reagan proved deficits don’t matter.”

O’Neill shook his head, hardly believing that Cheney – whom he and Greenspan had known since Dick was a kid – would say such a thing.

O’Neill is described as leaving Cheney’s office in a “mild state of shock.” Well, he shouldn’t have been. The ideological core that energized the long slog from Ronald Reagan to George W. Bush crafted those deficits intentionally and thereby intentionally increased the national debt. This was the blunt instrument that would cause, they hoped, the demise of government; and as those famous words from Casablanca, it was a long term project, “Maybe not today. Maybe not tomorrow, but soon and for the rest of your life.”

Yes, they often spoke with what appeared to be conviction about the evils of deficit spending, but did they follow through? Of course not. Deficits were demanded by their ideology set as it was (and still is) against government. Deficits were consciously matched with – and supported – their starvation and political interference with agency work, and, of course, they religiously intoned the mantra of deregulation as a “cure all.” You think Michael Brown at FEMA was a mistake? With all their tools, the GOP went on to carve out a deficit creation record that would have left even Reagan breathless, and, perhaps, rather shocked by their overreaching.

J’Accuse! Should they succeed in booby-trapping the fiscal stimulus plan and thereby plunge the nation into its Second Great Depression, the GOP will then turn on a dime, and slyly in full hoodwink turn to the American public and say, “See, government doesn’t work! Its meddling caused the depression!” and other self-fulfilled prophecies pulled from their Voodoo Economics Textbook and ideology of greed and craven selfishness. “Self-fulfilled” because their policies of starving agency talent and budgets resulted directly in agencies that, indeed, do not work as well as they could. “Self-fulfilled” because it’s been GOP policies of radical deregulation that fueled the collapse that they already try to blame on Democratic policies dating back to, of course, FDR.

This is their moment, and they believe the truly wealthy will ride out a depression quite well; indeed, they’ll profit from it buying up distressed real estate, company stock, low cost inflation adjusted bonds, etc.. The rest of the country, the 90% who will suffer, will thus be understandably primed for the GOP laissez faire message; no one, GOP ideologues think, will want to talk “socialism” anymore. It’s the GOP plan. And Americans have been quite literally robbed of effective government for many years because of it. And now we’re being driven to a massive depression if we do not stand up to them and say simply, loudly, and repeatedly,

“Enough. We’re on to you!”