The Republican’s Achilles Heel: The Economy

The 2010 midterms demonstrated a changing of hands in the US House and displayed the growing anger of many Americans about our financial situation. The current economic philosophy in America has failed, and the answer is not to double down on the failed policies of the past, but to fight for stronger reforms that are the only real solution to the economy.

For those who feel we have been defeated , know that this was the intent of the puppet masters of the last election, to make those who seek to make our country a better place through progressive change and reform to feel defeated. The message was intended directly to Obama as well, to make him feel defeated and isolated so he abandons the very reforms that are necessary to make our country a place where everyone has an opportunity. Their message is and always will be fear, anger, and hate, and they can afford the devious and unscrupulous media spin doctors to deliver that message on many levels.

This message of fear and anger was delivered by a corporate machine that wants nothing less than full blown control over every lever of power in our government. They want to install an oligarchy where control rests in the power of elite investment bankers, CEOs, and the very rich, a concept that is contrary to the very freedoms enshrined by our forefathers in the Constitution, Bill of Rights, and Declaration of Independence, and they are more than willing to exploit the current economic crisis they themselves created to increase their grip on our country.

The multinational corporations are willing to stoke the basic fears of economic necessity for their objectives. They have stoked the fear of the national debt to rile up a hornets nest of anger, but where were these angry mobs when the national debt doubled under the Bush/Cheney regime and a Republican dominated Congress? Why do these people who worship at the altar of Ronald Reagan fail to criticize him for tripling the national debt? Why is it that all of a sudden this anger boils over when the Democrats had a 2 year span of real power?

They already have control over the judicial branch and now half of the legislative branch . We have the Senate and the Executive branch, as long as we have the strength and courage to hold it. It is a divided Congress and divided government. The Republicans have already very clearly stated that they have no wish to compromise on anything, so we can all look forward to two full years of stagnation.

Prepare for this, but understand that progressive reform still has the moral high ground here. Fiscal conservatism is precisely what put America in the situation it is in now, and instead of removing yourself from the fight, right now is precisely the perfect time to entrench our position and redouble our efforts. Here are the economic issues where we can successfully make our case to independent minded voters.

The Deficit and National Debt

The 2009 budget deficit was a staggering $1.4 trillion, which tripled the deficit of $450 billion in 2008. Obviously the fault of President Obama and the Democratic controlled Congress right? Wrong. According to the libertarian Cato Institute, we should not blame Obama for Bush’s 2009 budget deficit Budgets are submitted to Congress by the executive branch, and significant changes rarely have happened since Ronald Reagan expanded the powers of the presidency under the guidance of Treasury Secretary Donald Regan.

Not only was the doubling of the national debt and ballooning of the 2009 deficit ultimately caused by fiscal conservatives, the deficit for fiscal 2010 shrunk by 9% and if it were not for the greatest economic downturn since the Great Depression, it would not be nearly as staggering as it is. Those who have followed my writing since late 2004 know that I am a debt watchdog, and was sounding the alarm years before the Tea Party (early or late versions) even existed, so know that fiscal progressives are closely monitoring this situation closely, and are fighting hard to create a surplus by the end of Obamas presidency in 2016.

The national debt is a serious concern, but we as a nation need to examine the root causes behind it to find real world solutions. 82% of the national debt was incurred under Republican administrations, the majority of it since Reagan. Much of this stems from the deliberate outsourcing of good jobs to cheaper labor markets overseas that have no environmental or worker safeguards. Much of this stems from deliberately creating large deficits under the fiscal conservative policy known as ‘Starve the Beast‘ which is supposed to force cuts in social programs.

Tax Cuts

Nearly $300 billion in tax cuts were given to the 95% of Americans, those making less than $250,000 per year and small business as part of the American Recovery and Reinvestment Act (the Stimulus Bill). While there is little debate that this helped the vast majority of people in some way, it was a theme that was lost during the 2010 election debate. The ARRA was typecast as ‘another big spending project’ along the lines with the TARP bank bailout passed by Bush without regards to the significant role it played to stop the economic slide and to create jobs. 

The Bush tax cuts for the rich are set to expire at the end of 2010. If they are renewed, $700 billion will be added to the deficits over the next decade.  Further, not allowing all of the Bush tax cuts for the wealthy to expire (the estate tax, reductions in capital gains taxes, and dividend taxes) would add $4.4 trillion to the national debt within 10 years. Tax cuts for the rich have never been proven to generate greater federal income or to increase jobs. Cutting taxes decreases revenues, just as making a smaller income leads to less change in your pocket.


“money was all appropriated for the top in hopes that it would trickle down to the needy.”

-Wil Rogers

In fact, the entire premise of trickle-down economics has been proven to be false for decades. Since deregulation and tax cuts for the rich became the dominant economic paradigm under Reagan, any resulting economic expansions have been reaped exclusively by the rich. Currently, one third of all the pay in the United States is raked in by corporate executives In 1970, the average CEO made 28 times what an average worker at his company made. By 2005, this had swelled to 465 times what an average worker made. This is phenomena exclusive to the US, and is not shared by other developed Western nations like Japan where an average CEO makes less than 20x what an average worker does.


Economic policies that favor making the rich richer do nothing for Main Street America. That is an illusion, and until real wages for the vast majority of Americans improve, tax cuts for the rich will only make the situation worse.

Military Spending

The #1 welfare project of them all however is military-related expenditures, which account for a whopping 53% of the annual budget. While the official government figures record this as a mere 23% of the federal spending, that figure cloaks the costs of supplemental appropriations for foreign engagements, corporate welfare for (often no-bid) private defense contractors, veterans benefits and education programs, civilian research and development projects, direct intelligence agency funding, and interest on the national debt incurred from previous military-related spending. We are now spending almost as much as the rest of the world combined on our collective military, which is more than we were spending during WWII (in inflation-adjusted dollars).

ve-military-spending

If we slashed military-related expenditures by 90% and adopt a purely defensive military posture, we as a nation could instantly end the budget deficit, and have money to spare to fund deteriorating infrastructure, education, and green energy projects.

Jobs

More private sector jobs were created during 2010 than the net total under Bush, but that seems to have slipped by unnoticed. Cheap-labor conservatives are actively engaging in an unspoken class warfare against the poor and middle class to create a situation where everyone except a select privileged few are hungry and desperate, willing to do anything just to make ends meet so that the rich can have a few more luxuries.

The concept that if the rich and big corporations can only just get ‘big government’ out of the way, everything will somehow work itself out so that everyone is better off is a lie. It is worse than that, it is a bald faced lie spread by conservative propagandists to convince the poor that their only chance is to give the corporations more power over their economic freedoms.

Large multinational companies do not want people to have jobs, much less those with a living wage, benefits, retirement security, or workplace safety. These companies want pesky regulation to either not exist or to not be enforced so that they can pay you less, give you less benefits, defund your promised retirement package, and not spend money to keep you safe and healthy. That is how they maximize profits, money that bubbles up to the top and will never find its way into your pocketbook.

Low unemployment leads to a rise in wages and benefits (something CNBC calls “wage inflation”), something that perpetually worries wealthy investors concerned about their quarterly profit margins. This is why corporate spokesman like Sarah Palin like to praise the “productivity” of American workers without actually trying to help them, this is a code phrase to the wealthy that conservatives only want to keep you hungry and desperate so you work harder for less.

Times are tough. Unemployment is at ~10%. This problem will not be solved by destroying unions, defunding the Department of Labor, and removing safeguards for the vast majority of working people in America. It will be solved by fighting to create new jobs here at home with good wages, something fiscally progressive economic policy has proved to be better at for decades.


The movement for change and reform has not been defeated, only dealt a temporary setback. Progress is never easy, it is extremely difficult, but it is a fight that is worth fighting. The future of our nation depends on ordinary people rising to do extraordinary things, and ensuring our economy moves towards recovery must be the focal point of our efforts over the next two years.

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11 Responses to The Republican’s Achilles Heel: The Economy

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  5. -2 Vote -1 Vote +1jack
    November 10, 2010 at 10:27 am

    This article has several errors. You are aware the jobs created by Clinton went boom when the tech bubble collapsed, the bubble was created in part by artificially low interest rates. Fiscal conservatism didn’t cause the problems of today. Look into the community reinvestment act, fannie mae and freddie mac and the federal reserve’s role in the housing crisis. But the author seems to think that fiscal conservatism is being practiced by republicans. it is not. And to not blame Obama for today’s budget crisis is silly. He also has his tax cut info completely and verifiably wrong but I would have to spend three hours just to correct him. Keynesian economics have failed. Period.

  6. -2 Vote -1 Vote +1jack
    November 10, 2010 at 10:29 am

    also it is obvious to anyone with an IQ above 60 that Unions have hurt employment in the US which is why right to work states have lower unemployment. This article is mere propaganda and I am opposed to military spending and I don’t vote republican.

  7. -2 Vote -1 Vote +1Chris
    November 10, 2010 at 10:51 am

    Also note that CEO pay may be higher then most other country’s but what is not mentioned here is that worker salaries are higher for the US then most other country’s, unlike living in a cube in Japan or a tiny apartment in Europe our living is much better overall. However our corporate tax rates are the second highest in the world next to Japan at 40%. They need to be lowered. Clinton created a lot of jobs under a republican controlled congress. Anyone recall Gingrich? Military spending should only account for 10% of the budget unless a war is going on. Not a real issue. Cut the environmental regulations, union control and taxes and stop shipping jobs over seas. Then we will get back on track.

  8. -1 Vote -1 Vote +1rj
    November 10, 2010 at 11:49 am

    ‘fraid that is wishful thinking, fed just started monitizing the debt to the tune of 600 billion, get ready for inflation, articles I read from trusted reports indicate 20% devaluation of dollar will be result, not to mention China’s leading experts just downgraded the US credit rating,

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  11. -3 Vote -1 Vote +1Bilgeman
    November 13, 2010 at 1:46 pm

    O-cubed:
    “The current economic philosophy in America has failed, and the answer is not to double down on the failed policies of the past, but to fight for stronger reforms that are the only real solution to the economy.”

    You’re on fire, O3! Too danged right! Obammunism is a failure getting tossed into the compost-heap of history!

    “For those who feel we have been defeated , know that this was the intent of the puppet masters of the last election, to make those who seek to make our country a better place through progressive change and reform to feel defeated.”

    ( what is it with you? One step forward, and two steps back! sigh…).

    It wasn’t “feeling defeated” you WERE defeated. You were “shellacked”…the worst Congressional defeat since Nineteen Forty Six!

    And far from your “evil corporate bogeyman” delusions, it was the citizens that delivered their verdict.

    This is democracy, O-cubed, it works pretty well with a “reality-based community”.

    With stone-cold kool-aid drinking addicts who refuse to see what is plainly in front of them, not so well…

    “The future of our nation depends on ordinary people rising to do extraordinary things, and ensuring our economy moves towards recovery must be the focal point of our efforts over the next two years.”

    True enough, and it’s happening right before your eyes, man.
    You’d better hurry up and get aboard the TEA Party with the rest of the extraordinarily ordinary citizens, or you’re going to plumb miss the bus, and two years fro now you’ll still be pushing that broken down old Marxist wheelbarrow…

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