Thursday, April 21, 2005

Why Republicans economists must hate America

I have lived overseas now since 2001 and watched as my British Pound has gotten stronger with each passing year. Mrs. Expat Teacher and I have had a standing order with our bank to transfer the same amount each month since 2002. We haven't changed our amount on this side of the ocean, but we've gained a "pay rise" of over $100/month in our US account due to the declining strength of the US Dollar. So much so that we have increased our giving to missionaries we support like YoungLife and Wycliffe without making any additional sacrifice here in the U.K. So why is that? God's blessing or just horrible leadership from the Republican Party on the economy.

While some (especially our missionary friends) would say it is God's divine providence, I think it is the blind faith devotion that the Republican Party has with cutting taxes, especially on the rich. Let's see, according to Alan Greenspan, our biggest problem now is our national debt, but the Republican Congress and White House just passed the elimination of the estate tax because people worth over $10 million dollars have too high a tax rate.

Then in an effort to stymie the economic inventiveness of America, the Republican Congress passed the bankruptcy bill. The bill was LITERALLY written by credit card companies and contains no provisions or exemptions for the armed forces, job loss, family death or long-term illness. The credit card companies can now take everything AND they've made it harder to declare bankruptcy to offer a second chance. Think most people are Vegas addicted plastic-holics? Try again, this Christian Science Monitor piece digs below the surface and provides some real insight into this bill.

Now maybe the bill is needed, but puts a huge roadblock in the way of entreprenuers. Why start a new business, which might fail, if now I can lose my house and I may not be able to file for bankruptcy at all. It is just easier to stay in my current job (or worse on the publicly-financed safety net). Jobs are created by small businesses and Republicans have just made being a new small business owner all that much tougher.

Some defenders of Republican economic policies will say that tax breaks always stimulate the economy. I'd offer up 2000-2005 as an example of when they didn't, but a more scholarly review of the complete inconsistentcy of tax breaks and economic growth is here. If you don't have time to read it or look at all the charts, here is the crucial sentence to sum up the report,
However, what this study does show is that any attempt to stimulate economic growth by cutting taxes for the rich will do nothing -- it hasn't worked over the past 50 years, so why would it work in the future

My final thought is this, why would someone want to implement these policies that so severely hurt the American economy? It must be that Republican economists hate America. Why else drive it off a cliff?