Pick Wayne's Brain

March 22, 2015

It’s Clearly Not A Budget

Filed under: Commentary — Tags: , , — Wayne A. Schneider @ 10:26 PM

It’s supposed to be a budget, but clearly it’s not. Sure, it’s got some numbers in it, but it also has places where there are no numbers, just huge assumptions about money that even a high school student would find obviously wrong. For example, they want to repeal Obamacare (because, what, 57th time’s a charm?) but they make no provision for where the tax revenue the ACA generated will be raised. The other major problem with that thing with numbers is that it calls for cutting a trillion dollars in spending without specifying the programs being cut. The likely candidates are “food stamps, disability payments for veterans, the earned income tax credit, and Pell grants for college students,” but even cuts there won’t make up for the money Republicans claim they won’t be spending. In short, there is no way this Republican budget can have any connection to Reality.

That’s putting it more kindly than Paul Krugman. He called Republicans the “Trillion Dollar Fraudsters.”

One answer you sometimes hear is that what Republicans really believe is that tax cuts for the rich would generate a huge boom and a surge in revenue, but they’re afraid that the public won’t find such claims credible. So magic asterisks are really stand-ins for their belief in the magic of supply-side economics, a belief that remains intact even though proponents in that doctrine have been wrong about everything for decades.

And therein lies the problem: Republicans are governing this country based on a philosophy that has historically been proven wrong. Tax cuts for the rich do not create jobs. Consumer demand creates jobs, and so do public works programs. If you give more money to the super wealthy by cutting their taxes, they are not going to spend all that money, which is what is needed for the economy to function. The economy only works when money moves around. You buy something from your local merchant. He takes your money, and money from other customers, and he replenishes his stock of the things you all bought. He does this by going to his vendors and buying those products you bought from them. Those vendors, in turn, do the same thing and replenish their own inventory of goods. If a business owner is buying a service from another company, she gives that company her money for their services, and they use it to pay their employees, who go out to their local stores and buy the things they need. If everything is working the way it’s supposed to, the consumers have the money to buy the things they need, the vendors sell enough goods and services to pay their employees and vendors, the businesses involved make a little profit, and the shareholders of those companies get a little more money for themselves. The poor and many of the middle class often live paycheck to paycheck. They spend most, if not all, of what they bring in. Rich people don’t do that. If you give a worker an extra fifty dollars in his paycheck, there’s a good chance he’s going to spend most of that $50, thus stimulating the economy as described. You give that super rich person an extra $50 and he’s not even going to notice it (so he won’t notice when it’s not there), because it’s probably going to end up in some offshore bank account, free of taxation. Public works programs also stimulate the economy because in addition to providing jobs (so people have money to spend), they reduce traffic delays which result in lost productivity. The beneficial ripple effects of an infrastructure spending program are too numerous to detail, but they are one of the best ways to stimulate the economy, along with continuing to pay out unemployment insurance benefits. You can bet that money isn’t going out to offshore bank accounts.

But it starts with someone spending the money in the first place, otherwise there’s nothing to “prime the pump.” If people don’t have money to spend, or have billions of dollars but are not spending it, the economy doesn’t work. Goods and services aren’t sold and businesses are forced to layoff workers. (If they’re not bringing in money, they have no money to pay employees.) Unemployment rises, and so does government spending on benefits (which were earned, by the way, not just handed out to anyone who asks.) Assuming there’s money in the government budget to pay unemployment insurance benefits. Republicans love to cut UI benefits because their rich overlords equate social worth with financial worth. They believe that if you’re poor, it’s because you made bad choices in life, such as not being born into a wealthy family. They believe (with all their cold, black hearts) that because they’re rich and you’re not, that they are better than you. They falsely believe that they made it on their own (including the ones who inherited wealth), and that they never needed any help from the government. How wrong they were. Setting aside their own education (since the super wealthy often have private tutors and attend private schools where they make their private connections in life), there are many ways the super wealthy depend on government. For example, they require roads to earn their wealth. Even if they fly themselves to work in their own helicopters, the people who work for them, the people who deliver the supplies their businesses need, all depend on roads paid for by the public. Their places of work (and homes) are protected by police officers paid for by the public. They use water and electricity often supplied by a delivery system paid for by the public. And this doesn’t even go into the all the ways the government helps the people who help the super wealthy make more money. And if it’s paid for by the public, it’s done through the government. (Because We the People are the Government.) So it is simply not true that any super rich person made it “all on his own.” Their wealth was made possible by the liberal framework around which our society is built. You can’t have a nation of people who look out only for themselves. It just can’t work. Where’s the sense of Community if nobody helps each other out? That’s what our government is – people helping each other out, even if the people being helped out don’t understand that. Actor Craig T. Nelson once said to Fox News Channel (where ignorant, frightened people turn to find out what to fear), “I’ve been on food stamps and welfare. Anybody help me out? No.” Actually, Craig, Yes, somebody did help you out. Your fellow citizens. By having your government give you food stamps and welfare. You’re welcome.


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