Letter to the Editor

Republican economic myths

Tuesday, October 12, 2021

Recently as well as historically, we have seen commentary from both of our Iowa Senators, our House Representative and other Republican legislators or mouthpieces decrying Democrats as the “tax and spend” party. The problem is the facts do not bear this out. More realistically Republicans should really be branded as the “untax and spend” party, particularly given the party’s actions the past 40 years.

Deficit spending by administrations from Truman through Carter averaged $82.6 billion with GDP averaging 3.36 percent. In 1980 this all changed with President Reagan embracing supply side economic theory which claimed big tax cuts would drive unprecedented growth and prosperity for all. GDP did grow at 3.9 percent and 16.5 million jobs were gained, but deficit spending ballooned to $1.412 trillion, tripling the national debt. Much of this spending related to the military, including refitting WWII ships and other older systems that had no on-going economic value unless we went to war. The next president, H.W. Bush committed to continue this policy which led to another $1.036 trillion deficit, job losses and GDP dropping to 2.3 percent. Even though Bush was forced to raise taxes to cut deficits, his term culminated in a recession for in-coming President Clinton. Clinton raised taxes, gained 18.6 million jobs, achieved 4.4 percent GDP and left a $63 billion budget surplus. In comes G.W. Bush who again embraced supply side economics with a huge tax cut. This coupled with a disastrous Iraq war and run-away housing initiatives led to a massive $3.293 trillion deficit, a 2.4 percent GDP, huge unemployment and financial collapse/recession for the next president. Obama’s administration came into a no-win situation — continuing wars, a looming potential global depression and Republican-led Congress, after approving the TARP program, blocking any further actions he proposed. He had to agree to a tax cut to avert government shutdowns, thus his deficits recorded $6.781 trillion with GPD growth at 1.7 percent. However, after rescuing the auto industry, his administration saw annual deficit spending reduced from $1.5 trillion to $665 billion with 8.9 million jobs created and a rebounding economy for President Trump.

Predictably, Trump with a Republican-led Congress enacts the largest individual and corporate tax cut ever. These tax cuts were justified to assure capital investment, job creation and GDP growth. In reality, around 80 percent of corporate cuts went to stock buybacks, dividend increases and executive bonuses. Individual cuts widened wealth gaps. In only four years, tax cuts and spending coupled with total bungling of the COVID-19 crisis, led to $6.612 trillion in deficit spending, no growth, mushrooming wealth gaps, spiked unemployment and again a recession for President Biden — guaranteeing his first term would have to show huge deficit spending to right the economy.

Now after supporting a COVID-19 relief package, Republicans are right back at blocking any new legislation, refusing to raise the government debt ceiling and threatening government shutdown due to Democratic Party “tax and spend” policies. What hypocrisy! Since 1980, Republican administrations have run up nearly $12.5 trillion in spending deficits with no legislation toward a crumbling infrastructure, global warming, healthcare affordability, wealth gaps, immigration policy, gun violence, racial inequality or women’s rights. Their focus has been only on power retention at any cost, tax cuts and judicial appointments — rendering Congress and specifically the Senate inoperative. In fact, during this same time period, only Democratic administrations have pulled us out of recessions, addressed spending deficits and proposed any meaningful legislative priorities.

Legitimate government and economic bureau backed facts and numbers do not lie. Stop believing this on-going Republican Party mythical propaganda. It’s bad economics and non-legislative purpose leading our democracy perilously toward authoritarian rule.

Terry B. Yarns

Spirit Lake